In the know

IN THE KNOW

Home equity

PUTTING YOUR HOME EQUITY TO WORK FOR YOU

FEBRUARY 1, 2024 | HOME LENDING


You’ve spent all this time working for your house. Can your house work for you now in the form of home equity?

Average interest rates have gone up over the last year and a half, but it still may make sense to look at refinancing in some circumstances.

Paying down high-interest credit card debt that’s placing a financial strain on your household may be one of those instances. It’s not an uncommon issue. The total U.S. consumer credit card debt has risen to an all-time high, exceeding $1 trillion in the second quarter of this year.

It’s important to remember that even in economic downturns and higher rate environments, there are always opportunities. People are still moving to new communities, building additions to their home, remodeling the kitchen, whatever it may be.

Adams Bank & Trust can help guide you through those financial decisions. Our bankers can provide expert advice on different structures that may improve your cash flow or strengthen your overall economic position.

Whatever the circumstances, we’re actively engaged in your financial success.

YOUR HOME’S EQUITY CAN HELP YOU REACH YOUR GOALS

If homeowners are interested in using home equity toward their financial goals, there are a variety of loan products they should consider.

Terri Roberts, vice-president of mortgage banking at AB&T, says, “You can harness your home equity in a number of ways, whether that’s buying another house, making home improvements, or consolidating other debt.”

HELOC VS HOME EQUITY LOAN 

Two common options are home equity lines of credit (HELOC) and home equity loans. “The HELOC is a revolving line of credit tied to your house. It may be paid down and advanced again for a new need or purpose. A home equity loan is a second lien on your home that is usually termed out 10 to 15 years. If you have an existing mortgage loan at a lower rate, it’s not affected by the second loan.”

BRIDGE LOAN

Bridge loans are a unique specialty for AB&T. Roberts says, “This is a great option for buyers who don’t want to miss out on the home of their dreams if the first home hasn’t sold yet.”

Generally, liens are placed on both homes, and the bridge loan can be paid off or paid down and refinanced when the first home sells.

WHAT TO CONSIDER WHEN PICKING A MORTGAGE LENDER 

When interest rates are similar at different institutions, why does it matter where you go for your mortgage? Roberts says at Adams Bank & Trust, relationships are the key.

“Because we’re a local community bank, our lenders live and work in the same places where our customers are buying homes,” she says. “We’ve made it a priority to cultivate great local relationships with everyone involved in the process, from the realtors to the title professionals to the insurance agents. You don’t have to navigate on your own.”

Roberts adds that dealing with a local lender can make a crucial difference in your overall experience.

“Our customers say that working with Adams Bank & Trust is a completely different experience than dealing with other mortgage companies. We just make it easier for you. If there’s something we can do as lenders to streamline the process or make it a better experience, we’re going to do it."

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