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Why you should use a home equity line of credit (HELOC) to make home improvements


At long last, warmer weather has arrived. Along with gardening and spring cleaning, it’s also the ideal time to tackle your home improvement to-do list. Whether you’ve always dreamed of renovating your kitchen, adding another bathroom or finishing your basement, you can use a home equity line of credit (HELOC) to finance your home improvements.

HELOCs are an ideal option for home improvements because they offer low interest rates and flexible terms. If you use your HELOC wisely, it’s one of the more responsible ways to borrow money because you can choose to use as little or as much of the loan as you want.

Here’s why you should consider using a HELOC to make home improvements:

  • HELOCs offer a lot of flexibility: A HELOC is similar to a credit card; it’s a revolving line of credit that you can borrow from as needed. If your home improvement project needs to be completed in different stages, you can use your HELOC to borrow and repay money as you go. Most HELOCs come with a draw period, which is the amount of time in which you have access to the funds. If your HELOC has a 10-year draw, you can use it to complete different stages of your home improvement.
  • The interest you pay on HELOCs used for home renovations is often tax-deductible: As long as you use your HELOC to make improvements to your home, you can write off interest payments when you file taxes in most cases. For example, as long as you’re using HELOC funds to increase your home’s value or prolong its life, you should qualify for the deduction. Note: There are limits to this deduction, and you should consult a qualified tax professional to confirm.
  • Many HELOCs offer low interest rates and no fees: Compared to credit cards and other loans that can be used for home improvements, HELOCs generally offer lower interest rates. And unlike a home equity line of credit, you don’t have to borrow the money all at once; you can draw money in increments and pay it off as you go.

If you’re ready to use a HELOC to start your own home improvement project, First Merchants can help. Check out our HELOC promotion available for a limited time only.

Apply online today, or call 1.800.205.3464 for more information.