Senior Vice President & Loan Officer Adam Bain recently sat down with Morgan Ottier on QC Live to talk home equity loans and HELOCs.
So, what’s the difference between the two?
A Home Equity Loan provides a lump sum of money upfront. Like a traditional loan, you have fixed terms such as a fixed interest rate and consistent monthly payments on both principal and interest over the life of the loan.
This solution might be best suited for those big, one-time expenses like consolidating debt or building that HGTV-worthy backyard oasis. It's a straightforward process: you get the money, you start paying it back in fixed installments, and you know exactly when it'll be paid off.
A HELOC, on the other hand, is similar to a credit card that's tied to the equity in your home. Instead of getting all the money upfront, you get a credit line to draw from as needed over a period of time. Ready to install that new pool this year? No problem. College tuition payments starting next year? It’s covered. You can borrow, repay, and borrow again up to your credit limit.
The interest rate on a HELOC is usually variable, meaning it can go up or down based on the market. During the draw period, you may only have to make interest payments, keeping monthly costs lower. After that draw period ends, you start repaying both the principal and interest, typically over 10 to 20 years.
Which option is the best? That’s where we come in. Blackhawk Bank & Trust has loan officers available at each of our 17 branch locations to discuss your plans and craft the right lending solution for you.
Lending with us means your loan will be originated, processed and closed with your local lender. We service your loan locally, right here in the Quad Cities and your monthly payments can be made at any Blackhawk Bank & Trust branch, or automatically deducted from your account with us.
Ready to break ground on your next project? Click here to find contact information for the branch nearest to you.