The California housing market is viewed as a guideline for home sales across the country, and CNBC reported that San Diego median home prices reached $445,000 in July after experiencing double-digit growth. Homeowners in San Diego are able to cash in on increased home equity to make home improvements or large purchases while housing inventory still hovers around the three-month supply. According to CNBC, San Diego’s seasonal housing market is still moving quickly for well-priced homes in good condition.
San Diego homeowners are able to use Mission Federal Credit Union's line of home equity products to choose the best one for their individual needs. Mission Fed’s Home Equity Line of Credit and Home Equity Loan are two excellent programs for homeowners in San Diego to consolidate debt and gain a return for investing in their homes.
What’s the Difference Between a HELOC and Home Equity Loan?
Although similar in name, the two loan products serve different functions. A home equity line of credit is similar to a credit card in that the line of credit is revolving and allows borrowers to withdraw a certain amount every month. Since the house functions as collateral, HELOC interest rates might be lower than a typical credit card.
In contrast, a home equity loan offers a fixed rate for the life of the loan, which is given in one lump sum, and then repaid in monthly installments. This type of loan is useful to cover large purchases where the amount is known in advance, such a home renovations or college tuition.
Five Benefits of Leveraging Home Equity With Mission Fed
Operating in San Diego as a not-for-profit financial institution since 1961, Mission Fed is committed to delivering affordable home equity loans and lines of credit to benefit its customers’ financial goals. Here are five ways Mission Fed helps homeowners leverage their home equity in San Diego.
1. No Closing Costs or Annual Fees
Mission Fed saves its customers money by eliminating annual fees and closing costs for both its HELOC and home equity loan. These fees can typically cost a homeowner hundreds, if not thousands, of dollars.
2. Consolidate Debt With Low Interest Rates
A home equity loan allows borrowers to capture today’s historically low fixed interest rates for the duration of the loan. For anyone who prefers a variable rate, a HELOC might be the better option.
3. Make Interest-Only Payments
The interest-only HELOC option allows borrowers to make low payments against interest accrued on the account for the first 10 years of the loan. Interest-only monthly payments are often more affordable up front. Payments will then simply adjust to go toward the principal of the loan after the predetermined time period.
4. Borrow 100 Percent or More
San Diego homeowners may borrow up to 125 percent of the value of their homes with a home equity loan and up to 100 percent with a HELOC. To help borrowers understand which option is best for their budgets, the credit union offers a free home buying guide, through their Financial Literacy partner, FoolProof, for area residents.
5. Consider Potential for Tax Deductions
Interest paid on a Home Equity Line of Credit or home equity loan might be tax deductible, so homeowners should consult a tax adviser.
To learn more about a Mission Fed HELOC or home equity loan, visit https://www.missionfed.com/home-loans, any of their 27 branch locations in San Diego County, or give them a call at 858.524.2850 or 800.500.6328. You can even apply online. All San Diegans are welcome! Mission Fed is federally insured by NCUA and is an Equal Housing Lender.
Mission Fed is a GOBankingRates client.
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