Beyond the Remodel: Smart Ways to Put a HELOC to Work

When you hear “HELOC,” a home renovation might be the first thing that comes to mind. But a Home Equity Line of Credit can be useful for more than updating your kitchen or finishing a bathroom. 

The real advantage of a HELOC is flexibility. Instead of borrowing one lump sum upfront, you can access funds as you need them, which can be helpful when an expense happens in stages or the final cost isn't known from the start. 

Here are a few ways that this option could work for you. 

Fund a Project in Phases

Some projects don't come with one big bill. Maybe you're tackling several home improvements over the course of a year, or you're completing a renovation in different phases. 

With a HELOC, you can access funds as expenses come up rather than borrowing the entire amount upfront. That means you're not paying interest on money you haven't used. 

Not sure whether a HELOC or home equity loan makes more sense for your project? Learn more about your home equity options. 

Make Your Home Work for Your Future 

Your home may need to change as your life does. A HELOC could help fund improvements that make your home more accessible or comfortable for the years ahead, such as a first-floor bedroom or wider doorways. 

Planning these updates before they're urgently needed can give you more options and help your home continue to work for you. 

Invest in Energy Efficiency

Some upgrades can improve your home's comfort while potentially helping reduce energy costs over time. 

Consider improvements such as insulation, new windows, an updated HVAC system or other energy-efficient upgrades. A HELOC can give you access to funds for a project without requiring you to borrow the full amount before you're ready to get started. 

Make Room for More Generations

As families change, homes sometimes need to change with them. You might want to create a private space for an aging parent, add a bedroom for an adult child or make other updates to accommodate a multigenerational household. 

A HELOC can provide a flexible way to finance those changes as the project takes shape. 

Handle the Not-So-Exciting Expenses

Not every major home expense comes with an aesthetic Pinterest board. 

A new roof, septic system, driveway, drainage work or electrical updates may not be the projects you were dreaming about, but they're important investments in your home.  

A HELOC can give you another option when a large expense comes along and you don't want to deplete your savings all at once.  

Create Some Breathing Room for Life's Big Expenses

Some costs are difficult to predict or don't fit neatly into a monthly budget. Something like a major family expense, relocation, or unexpected medical or veterinary bills can require more financial flexibility than your regular cash flow allows. 

A HELOC may be an option for certain large expenses, but it shouldn't take the place of an emergency fund. Because your home secures the line of credit, it's important to borrow thoughtfully and have a plan for repayment. 

If you're using a HELOC for a meaningful milestone, such as growing your family through adoption, sending your kid to college or helping with a wedding, build the full picture of costs into your plan and avoid borrowing more than you need. 

Consolidate High-Interest Debt Carefully

Some homeowners consider using a HELOC to consolidate and pay down higher-interest debt. The lower rate potential can be appealing, but it's important to remember that a HELOC is secured by your home. Before moving debt, compare rates and fees, avoid adding new balances and make sure the monthly payment works within your budget. 

When You Know the Number, You Can Lock It In

With a Members 1st Home Equity Freedom Line of Credit, you can lock all or a portion of your line into a fixed-term loan when you know exactly how much you need for a particular expense.  

That can give you the best of both approaches: flexibility when you need it and predictable payments when you want them. 

A Few HELOC Questions? Start Here.

Who can apply for a HELOC?

Homeowners who live in Pennsylvania, Maryland or New Jersey can apply for a Members 1st Home Equity Freedom Line of Credit, subject to eligibility and credit approval. The HELOC is available to individuals, not businesses. 

What information do I need to apply?

Be prepared to provide information about your property, including its address, purchase price and property type; an estimated property value; the amount you'd like to borrow; personal and contact information; employment and income information; and information about your financial accounts and debts. Members 1st will also arrange for a property valuation as part of the application process. 

What makes the Home Equity Freedom Line of Credit different?

It gives you options. You can borrow as you go, pay back what you use and access your available credit again as needed. You can also lock all or a portion of your line into up to three fixed-term loans at one time, subject to applicable requirements. 

Think Beyond the Remodel

Your home's equity can be a valuable financial resource, but how you use it matters. 

Before borrowing, consider how much you need and how you'll repay it to know what type of financing would make the most sense. 

Getting Started

Borrowing against your home’s equity is an important financial decision, and you don’t have to navigate it alone. Our members have access to MyConcierge™—your go-to resource for guidance on spending, saving and planning for the future. Concierges are local Members 1st associates who can help you explore home equity loans and HELOCs, answer questions and find the option that fits your goals.