Each quarter we feature a mortgage lender answering some of the most commonly asked questions about purchasing and refinancing a home.

If you would like to submit a question for this column, please email info@cnbohio.com.


What can I do with a Home Equity Line of Credit?

According to Zillow.com home values have increased by 3.8% over the past year and they're predicted to rise an additional 2.2% within the next year. What this may mean for you is your home is worth more now than what you may think and the equity (the difference between what you owe and what it is appraised at) could be a great source of financing. Home equity loans allow you to borrow money using your home's equity as collateral. The funds can really be used for anything, although they're most commonly used for: home improvement, such as renovations or remodeling; paying for a college education; funding the purchase of a second home; or consolidating high interest debts, such as credit cards.

At Citizens National Bank, we typically offer a 10 year line of credit with a variable rate, but we also have fixed rate options. Minimum monthly payments are calculated at 1 or 1.5% of the outstanding principal, however as a line of credit the borrower may pay as much as they wish and it's credited back to the line to be available for future purchases. The borrower may draw on the line of credit at any time as long as there is availability of funds. The home equity line of credit is paid over a period of time, but it is not an amortized loan and a balance could be due at the time of maturity.

It's easy to apply for a home equity line of credit - simply begin your application online or speak to a mortgage lender in any of our offices. You'll be required to provide 2 years of W2's and tax returns, a copy of your most recent pay stub and a listing of your current financial assets and liabilities. A new appraisal and updated title search may also be required.


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