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Can you pay off a HELOC early?
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Borrowing against your home equity can be an effective way to add cash to your coffers if you need it. Whether it’s to start a small business or do home repairs, you’ll usually get a better rate than you would with other loans. One option for borrowing against your home equity is to open a home equity line of credit (HELOC).
HELOCs work like a credit card – you use a line of credit to pay for things, and the lender charges interest. After a set period of time, the line of credit closes and you must repay the money you borrowed, plus the interest accrued.
The interest can start to add up on these loans, so it’s understandable that a borrower might want to pay off their loan early. With all the rules and regulations around lending, though, you may want to make sure that paying off their loan early is the right move.
Start shopping for a home equity line of credit online now.
Can you pay off a HELOC early?
Paying off a loan early saves you in interest payments and lets you start focusing on other aspects of your finances like retirement saving or investing. Here’s what you need to know about paying off a HELOC early.
Generally speaking, you are allowed to pay off your HELOC early. Just like with any other loan, you can make extra payments against your principal and end up paying off the totality of the money you borrowed before the term of the loan is over. This means that you’ll get out of debt earlier and you’ll pay less in interest.
A HELOC has two phases: the draw period and the repayment period. The draw period is usually between five and 10 years. During this time you take out money as needed and you make small payments that only cover interest, not principal. After the draw period is over, the repayment period starts. During that phase, the money you owe – interest and principal – is paid off over a preset period of time, often 20 years.
Some HELOCs will let you pay off the principal during the draw period as well, which would greatly reduce your interest payments when the draw period ends. You could even completely pay off the principal during the draw period if you want. Some loans don’t allow this, though, so check before you open the line of credit.
It should be noted that some HELOCs could come with a prepayment penalty. This is a rider on a loan that allows the lender to still collect what they stand to make if borrowers choose to pay early. If you think paying off your HELOC early is something you might want to do, make sure you take the time to investigate whether your HELOC has a prepayment penalty before you open the line of credit.
Start shopping for a HELOC today and get started with your projects.
3 great reasons to open a HELOC
Here are a few possible reasons you might consider using a HELOC:
Home values are high right now
A HELOC is only as valuable to you as the equity you have in your house. This means that if your house is worth a lot, you have the ability to borrow money with a HELOC. Right now, home values are very high. There is no predicting when that could change, but when it does, a HELOC could become less lucrative. If you need to borrow money and want to use home equity to do it, now is a great time to consider it.
Interest could be tax deductible
One of the most popular uses of a HELOC is to do home improvement projects, whether to make your house more livable or improve the resale price, which would also let you pay off your HELOC more quickly.
If you use a HELOC to perform improvements on the home the HELOC was taken out against, the interest is tax-deductible. This could benefit you when filing taxes.
Housing stock is low
If you aren’t happy with your current home and are looking for a new place to live, there aren’t a lot of options out there currently, and what is there is very expensive. Another option could be upgrading your current home, and a HELOC is a great way to do that.
You could use your HELOC to renovate your kitchen, finish your basement or even build an additional wing to your home.
The bottom line
Generally, it’s OK to pay back your HELOC early – and you’ll save yourself some cash if you do. There are some HELOCs, though, that have limits on this. Make sure you know all the details of your loan before you open the line of credit so you aren’t surprised when trying to make payments several years from now.
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Sen. Mark Kelly says feds need to do a “better job” of letting Americans know “there’s a huge amount of misinformation” on election
Washington — Sen. Mark Kelly said Sunday that the federal government needs to do its part to inform Americans of the vast swath of election misinformation that’s being consumed on social media platforms like X, TikTok, Facebook and Instagram.
“It’s up to us, the people who serve in Congress and in the White House to get the information out there, that there is a tremendous amount of misinformation in this election, and it’s not going to stop on Nov. 5,” Kelly said on “Face the Nation with Margaret Brennan.”
Kelly, who sits on the Senate Intelligence Committee, said he’s seen these misinformation operations target not only his state of Arizona, but also other battleground states.
“There is a very reasonable chance I would put it in the 20 to 30% range, that the content you are seeing, the comments you are seeing, are coming from one of those three countries: Russia, Iran, China,” Kelly said.
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In a committee hearing last month on foreign threats to the 2024 election, Kelly presented screenshots of Russian-made web pages showing fabricated headlines designed to look like Fox News and The Washington Post, targeted at voters in battleground states.
“So my constituents in Arizona and others — they seek to influence the outcome of these elections, and that is absolutely beyond the pale,” Kelly said at the Sept. 18 hearing. “We’ve got to do something about it.”
Vice President Kamala Harris and former President Donald Trump each have the support of 49% of Arizona voters, according to CBS News’ battleground tracker as of Sept. 30.
In another battleground state, Pennsylvania, Trump returned Saturday to hold a rally in Butler three months after an attempted assassination on him. He was joined by members of his own party and billionaire Elon Musk, who said Trump was the only way to preserve democracy and warned of a last election if he does not win in November.
Speaking to CNN’s State of the Union on Sunday, Kelly called the social media mogul a hypocrite.
“He’s standing next to the guy that tried to overturn the 2020 election on Jan. 6, saying that this is somehow going to be the last election and they’re going to take away your vote,” Kelly said. “And you know, it just doesn’t pass the logic test.”
At the White House press briefing on Friday, President Biden – speaking from the podium for the first time since taking office – said he’s confident of a free and fair election but alluded to the 2021 insurrection at the Capitol in his concerns on whether it will be a peaceful transfer of power.
“The things that Trump has said and the things that he said last time out when he didn’t like the outcome of the election were very dangerous,” Mr. Biden said. “If you notice, I noticed that the vice-presidential Republican candidate did not say he’d accept the outcome of the election, and they haven’t even accepted the outcome of the last election.”
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