One of the great things about Indian River County is that there are plenty of options for homeowners who need money for various purposes. One of these options is a HELOC loan, which is available for anyone with equity in their Indian River County home.
So popular is this type of loan that across America, the total home revolving debt currently amounts to $320 billion.
If a HELOC seems like it could be the right solution for you, you may want to learn more about what they are, how they work, and what their benefits are.
What Is a HELOC and How Exactly Does It Work?
A HELOC loan is a home equity loan that allows you to borrow against the equity in your Indian River County home. The loan works like a line of credit, which means you can borrow as much money as you need, up to your credit limit, and you only have to pay interest on the money you borrow.
HELOC loans usually have a draw period, the amount of time you have to use the loan, and a repayment period, during which you must repay the loan. The typical draw period is five to ten years, and the repayment period is usually 20 years.
During the draw period, you can make withdrawals from your HELOC as needed. You will only be required to make interest payments on the money you borrow during this time. At the end of the draw period, the repayment period begins, and you will be required to make monthly payments of principal and interest until the loan is paid off.
Understand the 75-15 HELOC for Condos in Florida
If you're a condominium owner in Indian River County, you may be eligible for the 75-15 HELOC. With this HELOC loan, you may be able to borrow 75 percent on your first loan and up to 90 percent when you combine your first and second mortgages.
The 75-15 HELOC is a limited review loan, which means it doesn't require fidelity bond coverage or an analysis of the association budget. This makes the approval process for this type of loan faster and easier. Also, lenders don't mind the number of owner-occupied or investor units when reviewing your eligibility for this HELOC loan.
Why Should You Opt for a HELOC Loan?
Any financing option can come in handy when you're in dire need of money. But a HELOC loan has the advantages that make it a better choice in certain situations. Here are some of the benefits of HELOC loans:
You Can Access a Significant Amount of Money
According to Zillow, the typical Florida home currently costs $402,837. If that's the value of your home and you're equity rich, then you may have access to a large sum of money through a HELOC loan.
With a HELOC loan, you may have access to anywhere between 80 percent to 90 percent of the appraised value of your Indian River County home. This can come in handy if you need to make a large purchase.
Fast and Hassle-free Approval
Getting approved for most types of loans can be long and tedious. Many have stringent eligibility requirements that can make it difficult to qualify. Many times, the approval process takes a day or so. But a HELOC loan is different.
With a HELOC loan, the approval process is usually fast and hassle-free. As long as your home has enough equity, you should have no problem getting approved for a HELOC loan.
Only Pay Interest on the Money You Borrow
There's a reason experts recommend paying attention to the interest rate when taking out a loan. A loan's interest rate determines how much you'll pay in the long run. HELOC loans charge an interest rate only on the money you use.
This is different from a home equity loan, where you're required to pay interest even if you don't use the loan. With a HELOC loan, you can make minimum payments until you need to use the loan. This makes HELOC loans much more affordable than other types of loans.
You Enjoy Competitive Interest Rates
Lenders typically determine interest rates based on several critical factors, including whether the loan is secured or not. Secured loans generally have lower interest rates because an asset backs them.
And HELOC loans are secured by your Indian River County home equity. This makes them more attractive to lenders, resulting in more competitive interest rates.
You Can Get Tax Breaks
The mortgage interest you pay on your Indian River County home is usually tax-deductible. This applies to both home equity loans and HELOC loans. So, if you're paying interest on a HELOC loan, you may be able to deduct the interest come tax season. This can help lower your overall tax liability.
Currently, HELOC loans are deductible for up to $750,000 following the passage of the Tax Cuts and Jobs Act in December 2017. This is up from the previous limit of $100,000.
You Have More Repayment Flexibility
With most loans, you must make fixed monthly payments over a set period. But with a HELOC loan, you have more repayment flexibility. This is because HELOC loans typically have a draw period followed by a repayment period.
During the draw period, you can borrow as much money as you need and only make interest-only payments. Then, you'll repay the principal plus any remaining interest during the repayment period.
This flexible repayment structure can be helpful if you're not sure how much money you'll need or when you need it. It also allows you to repay your loan early without prepayment penalties.
There Are No Limits on How You Can Use the Money
With most loans, you have to use the loan for a specific purpose. But with a HELOC loan, you can use the money however you see fit. A HELOC loan can be a good option if you're looking to pay a home upgrade bill, cover college tuition, or Consolidate Indian River County debt.
You may even be able to use a HELOC loan to settle a divorce. Given the pressure that divorce can put on your finances, having access to extra money can be a big help.
A HELOC Loan Can Help You Increase Your Home's Value
There's good news for homeowners who opt to pay for home upgrades using a HELOC loan. Not only can these upgrades make your home more comfortable to live in, but they can also increase your home's value.
So, if you ever decide to sell your Indian River County home, you may be able to get a higher sales price thanks to the HELOC-funded upgrades.
Remember that not all home upgrades will increase your home's value. If you're unsure which upgrades to make, it's a good idea to consult a real estate agent or other experts before taking out a HELOC loan.
What You Should Know Before Applying for a HELOC Loan
Now that you know some of the benefits of HELOC loans, it's time to learn what you should know before applying for one. Here are four things to keep in mind:
Check If You Have Enough Equity
The first step is determining if you have enough equity in your home to qualify for a HELOC loan. Lenders typically extend credit based on your home loan-to-value (LTV) ratio. So, if your home is worth $200,000 and you have a $100,000 mortgage, your LTV ratio would be 50 percent.
To qualify for a HELOC loan, you'll generally need an LTV ratio of 80 percent or less. In other words, you'll need to have at least 20 percent equity in your home. Keep in mind that some lenders may have higher LTV requirements.
Understand the Difference Between a HELOC and Home Equity Loan
HELOC and home equity loans are often confused because they use your home's equity as collateral. But there are some critical differences between the two types of loans.
For one, HELOC loans typically have variable interest rates, while home equity loans usually have fixed rates. Additionally, HELOC loans usually have shorter terms than home equity loans. HELOC loans also allow you to borrow only what you need during the draw. So, if you're unsure how much money you'll need, a HELOC loan can be a good option.
Know How Much You Can Borrow
Once you know how much equity you have in your home, it's time to find out how much you can borrow with a HELOC loan. Lenders will typically let you borrow up to 85 percent of your home's value minus any existing mortgage debt.
Consider a HELOC Loan With No Closing Costs
Some HELOC loans come with closing costs, while others don't. If you're not planning on borrowing a lot of money, choosing a HELOC loan with no closing costs may make sense. That way, you can avoid paying hundreds or even thousands of fees.
Review the Terms and Conditions Carefully
Before signing any paperwork, review the terms and conditions of your HELOC loan carefully. Pay close attention to the interest rate, repayment schedule, and any fees associated with the loan. Don't hesitate to ask your lender for clarification if you have any questions.
Steps When Applying for a HELOC Loan
Now that you're armed with the necessary HELOC loan information, it's time to start the application process. Here are the steps you'll need to take:
Check Your Credit Score - One of the first things you'll need to do is check your credit score. Lenders typically prefer borrowers with good or excellent credit, so it's a good idea to find out where you stand before applying for a HELOC loan. If your credit isn't as high as you'd like, you can take steps to improve your score.
Find a Lender - Once you know your credit score, you can start looking for a lender. When comparing lenders, pay attention to interest rates, fees, and repayment terms. It's also good to shop around and compare offers from multiple lenders.
Gather the Required Documentation - After finding a lender, it's time to gather the required documentation. This typically includes things like your tax returns, pay stubs, and bank statements. If you're self-employed, you may need to provide additional documentation.
Submit Your Application - Once you have all the required documentation, you can submit your HELOC loan application. Be sure to answer all questions honestly and accurately. Once your application is submitted, the lender will review it and decide.
Negotiate the Terms of Your Loan - If you're approved for a HELOC loan, the next step is to negotiate the terms of your loan. This includes the interest rate, repayment schedule, and any fees associated with the loan. If you're unhappy with the terms being offered, don't hesitate to negotiate.
- Close on Your Loan - The next step is to close your HELOC loan. This usually takes place at a title company or escrow agent. You'll sign the loan documents during the closing and pay any associated fees. Once the closing is complete, you'll have access to the funds from your HELOC loan.
Which Spots Serve the Best Ice Cream in Indian River County, Florida?
After a long day of shopping or exploring all that Indian River County offers, you might be in the mood for something sweet. If ice cream is your dessert of choice, you're in luck.
Here are five of the best places to get ice cream in Indian River County, Florida:
If you're looking for a delicious and creamy treat, look no further than Kilwins. This ice cream shop offers a wide variety of flavors, so there's sure to be something for everyone.
From classic favorites like chocolate and vanilla to more unique flavors like key lime pie and salted caramel, Kilwins has it all. And if you're feeling extra indulgent, you can even get your ice cream topped with fresh-baked cookies or brownies.
Head to Sweet Treats for an old-fashioned ice cream experience. This ice cream parlor has been serving delicious scoops for years, and it's easy to see why.
With classic flavors like strawberry and mint chocolate chip, as well as more unique options like honey lavender and dulce de leche, there's something for everyone at Sweet Treats.
And if you're in the mood for something other than ice cream, they also offer a selection of freshly-made milkshakes and floats.
The Ice Cream Club
This ice cream shop specializes in small-batch, artisanal ice cream, so you know you're getting a quality product. And if you can't decide on just one flavor, they offer a flight of four mini-scoops so you can try a little bit of everything.
With flavors like strawberry balsamic and dark chocolate sea salt, there's sure to be something for everyone at The Ice Cream Club.
If you want a more modern take on ice cream, head to Chill. The restaurant offers both classic and unique flavor combinations, as well as vegan and dairy-free options.
From classics like cookies and cream to more adventurous flavors like Thai tea and avocado lime, there's something for everyone at Chill. And if you're feeling extra thirsty, they also offer a selection of milkshakes and smoothies.
For a truly indulgent ice cream experience, head to Serendipity. This spot offers a wide variety of classic and gourmet ice cream flavors and a selection of toppings and mix-ins.
And if you're looking for something a little bit different, they also offer a selection of sorbets and gelatos. From cookies and cream to salted caramel pretzels, there's sure to be a flavor that satisfies your sweet tooth at Serendipity.
Apply Today and Enjoy the Benefits of HELOC Loans!
Few places in America's Sunshine State offer the same combination of benefits that Indian River County does. With access to the warm waters of the Atlantic Ocean and the scenic Indian River Lagoon, it's no wonder this county is a popular destination for homeowners.
And with HELOC loans available whenever you need financing, you never have to worry about settling home repair bills and other expenses. Visit a reputable lender and apply today!