The first Home Loan product we will discuss is the Home Equity Line of Credit (HELOC). This product serves as a variable rate loan that is tied to the equity of your home as collateral. When you have a HELOC available, you can use the funds to purchase or payoff anything, and you will receive the current HELOC rate. This product allows you to pay off those high rate credit cards or pay for that overdue home improvement with a low interest rate. When you have owned your home for a number of years, you have hopefully been making on-time monthly payments. Over time, your loan balance will begin to decline. The difference between the value of your home and the balance of any real estate loans is the equity you have in your home. For example, a member may own a home that is valued at $200,000.00 but they have a first mortgage balance of $75,000.00, allowing for $125,000.00 in equity. Most banks and credit unions, however, will only go up to 80 or 90% loan to value (LTV). In this situation, the member could get a HELOC @ 90% for $112,500.00. The best part of the HELOC is you will only pay interest on the portion you actually borrow on. For instance, if you have an $112,500.00 line, and borrow 10,000.00 to pay of that high interest credit card, you will only be paying the interest on the $10,000.00 advanced. This is a safe and economical way to save money, and pay off high interest debt. Next week, we will discuss the fixed rate option of the line of credit.