Fall fix-up season is here

A home equity loan may be right for your fall home repairs.

While the calendar may not signal a new season, we Wisconsinites know Mother Nature can bring a winter weather whenever she wants, so before the cold weather arrives again, it’s time to plan your home improvement projects or repairs to get your house ready for the cold months. And, with home repair plans, a trip to the bank is typically included.

There are several options homeowners may choose from to finance their repairs or improvements. The options include a home equity loan or home equity line of credit.

Home equity loans and home equity lines of credit have several advantages making them very attractive options for homeowners. Home equity loans are typically used to fund home improvement projects such as interior remodeling, adding siding or replacing the roofing.

You can also use this type of loan to payoff high interest college loans or credit cards. They essentially are a second mortgage on your home and are secured against the value of your home. In most cases, home equity loans are for a shorter term than traditional 30-year home loans.

Another advantage of a home equity loan is that you can usually get a fixed interest rate and generally at or lower than other loan options. This is a significant advantage particularly if you use a home equity loan to consolidate or payoff credit card debt. Credit card interest rates can range significantly and are typically much higher than home equity loans. But, keep in mind, some lines of credit also have varying interest rates, so this is something you’ll want to discuss with a banker who has experience with home equity loans and lines of credit.

To be eligible for a home equity loan, you obviously have to have equity in your home. Many people are concerned that they don’t have much equity in their homes due to the current economic climate. It’s important to know that while things have changed from pre-recession days, many homeowners still have equity in their homes. To determine how much equity you have in your home, take time to meet with a banker. They will ask questions pertaining to how long you’ve lived in your home, its location, how much your mortgage is and how much you were able to initially put down at the time of purchase.

Consider the following when you’re looking to qualify for a home equity loan:

Having equity on your home: This means that you owe less on the home than its estimated market value.

A good credit rating: The better your credit rating, the lower your interest rate will be, saving you money over the term of your loan.

Meet with a personal banker: Explain to a banker what you’d like to purchase or consolidate so they’re able to help you determine the best route to take to meet your financial goals. Remember, even if you’ve only been in your home for a couple of years, you may still qualify for a home equity loan or home equity line of credit and your banker can help determine this for you.

If you don’t think you’ll need a home equity loan to fund your home improvement project, you may still want to establish a home equity line of credit as this can give you access to an pre-approved amount of money. A line of credit can be used for immediate needs or provide peace of mind by knowing it’s available if you need it in the future. Home equity lines of credit are typically used for large purchases and not for regular, day-to-day needs.

Similar to a home equity loan, a home equity line of credit is based on how much equity you have in your home. The benefit of this type of credit is that instead of taking out a one lump sum of money, you can borrow as needed.

Before the weather turns cold and makes home improvements and repairs unthinkable, take time to meet with a banker. Talk with the banker about your project so they can discuss financing options and help you determine the best decision for your situation.

Citizens Bank is a diversified financial services company providing a wide range of commercial, consumer, mortgage, trust and financial planning services to a broad client base. For more information about Citizens Bank, visit www.citizensbanking.com.

Joe Harrison is the branch manager at Citizens Bank in Superior.

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