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A HELOC (or Home Equity Line of Credit) is a line of credit established by you based on a percentage of your home’s value.  With a HELOC, you’re approved for a total loan amount, but your financial institution does not give you the money outright in a large amount like with a loan. Instead, you get a credit/debit card or a checkbook (or both) and you withdraw money when needed. You only pay interest on the amount you’ve taken out, and you’re only limited by the total amount of the line of credit.

For Example:

Say you have a $300,000 home with a balance of $150,000 on your first mortgage and your lender is allowing you to access up to 80% of your home’s equity:

$300,000 x 80% = $240,000

$240,000 – $150,000 = $90,000 your maximum line of credit

Keep in mind that most HELOCs have variable interest rates. This means that as baseline interest rates flex up or down, so will your interest rate.

Now that we have established how you calculate your HELOC, the question is what can you do with it? HELOC’s are a multi-functional source of income available to you as a homeowner. There are very few restrictions on the uses of the money – most institutions do not allow gambling or major investments in the stock market, for example – but the other uses and possibilities are endless!

Most ideas that come to mind when you mention a HELOC are home improvement projects. Whether it is something necessary and routine like installing a new roof or as extravagant as an outdoor kitchen, a HELOC can provide you with the funds you need to achieve your dream! Most experts agree that putting the money you borrowed back into your home to increase its equity is the most favorable option, and will give you the largest return on your investment.

However, you aren’t pigeonholed into only using your HELOC for home improvements! You can also use this line of credit for tuition and school costs, a new car, a dream vacation, or even financing your first literary adventure, there is a financing solution for you! A line of credit may be the perfect option to finance your dreams and let your inspiration run wild!

Keep following this blog and our social channels as we share tips and tricks about the 45 uses of a HELOC in 90 days!


If you’re interested in establishing a HELOC or have questions about an existing loan product, click here or call us 215.788.5270 today! Also, check out our insurance page for a free quote today!