Your home can serve as a valuable tool in the event that you need a large amount of cash with attractive repayment terms. A home equity line of credit may be just the product to meet your needs. Home equity lines of credit can be particularly attractive because:

Rather than a lump sum, up-front payment, home equity lines of credit offer a draw period of up to ten years and repayment periods of up to thirty years.

Lines of credit offer access to your home’s equity for ongoing expenses such as your child’s college education. This can be particularly helpful if you have several projects or goals you want to accomplish over a period of time.

Home equity lines of credit offer a good deal of flexibility as they can be accessed through special checks, direct deposit, transfer, and access/credit cards.

They are tax-deductible. Home equity loans can be a valuable cost saving option because they allow you to pay off high-interest debt and still take a deduction on the loan amount at tax time.

Although there are a number of benefits, such as flexibility, available to you with a home equity line of credit, there are also some disadvantages. Among these:

Required discipline. If you plan to use the money to consolidate or pay off debt, you must take care not to accumulate additional debt on top of your home equity loan debt.

Variable Interest Rates: Understand fully about the interest that will apply and at what periods during the loan.

Balloon payments: If you are not careful, you may find that you owe the full amount that you borrowed when the loan comes due. Talk with your credit union representative to make sure that you fully understand the pros and cons of interest only payments, as well as how your loan will be affected if you pay only the minimum each month.