Your home can provide more than just a sense of security. If the value of your home is greater than the amount you owe on it, you can also take out a line of credit loan. These types of home loans are different than your traditional mortgage due to the benefits they offer. Below are three advantages to getting a line of credit.

Why You Should Obtain a Line of Credit

1. Borrow More Money

With equity in your house, you can obtain a line of credit loan based on the difference between your home’s value and the amount you owe. This type of loan is also called a second mortgage. For example, if your home is worth $600,000, but you only owe $450,000 on it, then you could borrow up to $150,000. Before going this route, make sure you know the maximum amount you can borrow against your home while complying with state laws.

2. Tax Deductions

Like your first mortgage, the interest paid on your home loan is tax deductible. You can save additional money if you itemize your tax filings on both your first and second mortgage. You’ll receive a higher tax refund as a result and can put the extra money toward another venture.

3. Lower Interest Rates

Unlike other kinds of loans, a line of credit on your home has adjustable rates with fixed terms that depend on the time you have to pay back the borrowed money. As a result, interest rates tend to be lower. You’ll also only pay interest on the money you use as opposed to the entire loan amount. For example, if you have a line of credit loan for $100,000 and only need $40,000, then you’ll just pay interest on the $40,000.

Are you interested in taking out a line of credit on your house? Hawaii County Employees Federal Credit Union in Hilo, HI, has been providing a wide variety of affordable financial services to its members for over 80 years. Whether you’re interested in looking at home loans with competitive rates or opening a savings account, their team will offer the financial solutions and products to fulfill your personal goals. They also offer online banking, cashback on debit purchases, and automatic bill payments. Give them a call at (808) 935-2969 to learn more about their home loans or visit their website to apply for a loan today.