Wednesday, December 3, 2014 / by Jason Schaefer
Very popular 8-10 years ago, Home Equity Lines of Credit are again making a come back. However, this time around, home owners appear to be using them in a much more responsible manner.
HELOCs were once thought of an easy way to attain cash. Home owners surveyed indicated they are using the HELOCs for projects such as kitchen updates, bathroom additions, new roofs, and other remodeling projects. Another 29% of home owners said they are using the money to take advantage of interest rates on financial products, consolidate debts, or pay off credit card balances. The survey indicated other major uses of a HELOC: buying new cars (27%), paying medical bills (18%), kids' and adults' education costs (15%), travel (15%), and small investments (13%).
Home Equity Lines of Credit are considered a much safer financial product in 2014 compared to years past. Most banks limit the combined loan-to-value ratio. In addition, lenders are more thoroughly reviewing documented income, employment, credit, and property values.
Source: Realtor Mag