Home equity: A powerful tool

March 18, 2022
A mother and son reading a book by a window

For more information on HELOCs, check out our downloadable guide.

Spring is finally here, the weather is warming up, and that means it’s time to tackle the special projects you’ve been dreaming of all winter. This could be the year you get that patio project going, take that vacation to a faraway land, or enjoy time with friends and family at the wedding of your dreams. No matter what’s on your to-do list, you can start moving projects from “to-do” to “done,” thanks to a powerful tool that’s at your fingertips: your home’s equity.

What is home equity?

Home equity is the amount of your home that you “own,” thanks to your down payment and monthly mortgage payments. Your equity increases over time as your property value increases or as you continue to pay down the balance on your mortgage loan.

For example, let’s say you purchased a home for $250,000. At the time of purchase, you put $50,000 toward the down payment and have since paid an additional $10,000 in principal off your mortgage loan. Assuming the value of your home hasn’t changed, this means that you have $60,000 of equity in your home.

Utilizing the power of a home equity line of credit

Building equity in your home is important for a variety of reasons, one being you can borrow against it. Savvy homeowners use the equity in their home for a number of life’s necessities (and luxuries) — educational expenses, vacations, weddings, emergency funds, and home improvements, to name a few. One of the ways to do this is through a home equity line of credit, or HELOC.

A HELOC is similar to a credit card (but very likely with a lower interest rate). It’s useful for situations where you’ll need funds over a longer period of time and not a large lump sum up front. And those funds are easy to access, too: We can issue a debit card that’s attached to your HELOC, and you’ll have 24/7 access via UBTgo.

HELOCs have many benefits:

  • Access to funds when you need it
  • You only pay interest on the amount you use
  • Potentially lower interest than other lines of credit
  • Flexibility to repay over a longer period of time
  • An easy-to-follow process, thanks to UBT

A HELOC allows you the freedom and flexibility to tackle one or multiple projects over a longer period of time without having to reapply for funds. It’s a line of credit that allows you to use the funds as you need them — and what could be easier than that?

If you’re interested in taking out a HELOC, we’re here to help. And now is a great time to take action: You can get a HELOC from UBT with a great promotional rate of 3.99% APRꭝ for 60 months (after that, 5.00% APRꭝ–8.00% APRꭝ). Click through to get started. 

  • Personal
  • Managing Your Money
  • Owning a Home
  • Home Equity

Learning Center articles, guides, blogs, podcasts, and videos are for informational purposes only and are not an advertisement for a product or service. The accuracy and completeness is not guaranteed and does not constitute legal or tax advice. Please consult with your own tax, legal, and financial advisors.

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ꭝOffer subject to credit approval. Requires automatic payment from UBT checking or savings account. Minimum loan amount of $10,000 in new money. Promotional APR of 3.99% (daily periodic .010932%) effective for a 60-month period from the date account opened. Upon expiration of the 60-month period, rate will be variable equal to Wall Street Journal published Prime Rate (“index”) then in effect plus a margin. The index as of 05/05/2022 is 4.00%. Current margins range from .50% to 4.00% resulting in corresponding variable APRs up to 8.00% based on the current index. The variable rate may change monthly and is subject to minimum APR of 5.00% and a maximum APR of 16.00%. Fees to open the plan rate from $220 to $815 and there is a $49 annual fee. You must also carry insurance of the property that secures this plan. Consult your tax advisor on deductibility of your interest. For applications received by 05/31/2022. Not valid on loans in process. Member FDIC.