Home Equity and Financial Safety: Which Loan Programs Can Help You Prepare for Uncertainty?

Blog posted On July 14, 2022

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Economists are watching the jobs market closely for hints of a slowdown. In times preceding economic slowdowns, the unemployment rate will typically increase, quits rate will fall, and job openings will decline. During times of uncertainty, Americans typically search for more financial safety and less risk – bonds increase, stocks fall, etc. There are several home loan options that can help increase your financial safety as well.

What is financial safety?

Financial safety is an important part of financial planning. It involves several different factors that all lead back to protection. Different aspects of financial safety can include protecting yourself from:

  • Getting your identity stolen
  • Falling victim to credit card fraud
  • Incurring large amounts of debt
  • Going into financial crises during economic hardship

The solution for a lot of these problems comes down to investment management. Making sure you’re checking your bank statements, managing your credit card use, avoiding unnecessary debt, and budgeting for savings are all great ways to boost your financial safety. Having a diversified investment portfolio can also help. Instead of just investing in stocks and bonds, investing in real estate can offer increased protection in case of economic hardship (i.e. a stock market crash etc.).

What are the benefits of home equity?

Home equity is the amount of home that you own. The greater your home equity, the greater your net worth and financial freedom. Many people tap into their home equity using a cash-out refinance, which allows homeowners to exchange home equity for cash (as long as you still have 20% equity remaining). With a cash-out refinance you can pay off unexpected expenses or high interest debt. However, it is only a one-time withdrawal. Other loan programs offer a continual line of credit, which can help create a source of money for unexpected expenses at times of reduced income.

What is a line of credit and how can it help?

A line of credit allows you to withdrawal money from a certain account when you need it. A home equity line of credit (HELOC) allows you to borrow money against the equity in your home. The amount of money available to you through a HELOC depends on your home’s appraised value and the amount of mortgage you have left to pay. Once you’re approved for a HELOC, it basically works like a credit card. You can access the equity in your home whenever you need and can use as much or as little as you want (without exceeding your maximum approved amount). Then, you can pay off your balance over time. The biggest benefit of financing expenses with a HELOC as opposed to a credit card is the interest rates. Interest rates on a HELOC are typically much lower than credit card interest rates – making them a good financial safety net in case of economic hardship.

How can the All In One Loan™ offer financial safety?

The All In One Loan™ is a line of credit linked with your checking account that provides 24/7 access to your home equity dollars without refinancing. Because it’s linked with your checking account, it makes it easy to transfer idle income and short-term savings earning

low interest into the HELOC to reduce monthly and lifetime mortgage interest payments while

keeping it liquid and available for future planned and unplanned spending needs. Some highlights include:

  • ATM-Debit VISA
  • access cards
  • Checks
  • Online Bill-Pay
  • Mobile Banking
  • Direct Deposit
  • Mobile Deposit (Check
  • Imaging)
  • External Account Transfers
  • Auto-Payment Set-Up
  • Client Concierge and
  • Customer Service

Unlike traditional HELOCs, the All In One Loan™ can help borrowers pay off their balance in half the time without changing their budget, keep their home equity dollars available for longer time, and avoid tens of thousands of dollars in interest.

If you’re interested in learning more about our HELOC program or All In One Loan™, contact us today.


Sources: MarketWatch