As the holiday season and year-end approach, November is the perfect time for a financial checkup. Taking a moment to review your finances now can help you identify areas to strengthen and set you up for success in the coming year.
Along with checking your budget and savings, it might be a good time to consider a home equity line of credit (HELOC). This flexible borrowing option allows you to tap into your home’s equity when you need it most. Let’s take a closer look at how a HELOC works—and whether now might be the right time to open one.
What is a HELOC?
A HELOC, or home equity line of credit, lets homeowners borrow against the equity they’ve built in their property. Unlike a traditional loan that provides funds all at once, a HELOC offers a revolving line of credit—you can borrow, repay, and borrow again as needed during a set draw period (typically 5 to 10 years).
During the draw period, you’ll usually make interest-only payments on the amount you use. This flexibility makes a HELOC a convenient way to fund larger or ongoing expenses while keeping your financial goals on track.
Why Should You Consider a HELOC This November?
Recently, HELOC interest rates have become more competitive, making them an attractive option for homeowners looking to access funds before the end of the year.
Opening a HELOC in November can provide financial flexibility for a variety of needs, such as:
- Home improvements or renovations that add comfort and value
- Building an emergency fund for unexpected expenses
- Consolidating high-interest debt into a single, manageable payment
With a HELOC, you can use your home’s value to support your goals—without having to refinance your mortgage or take out multiple loans.
What to Consider Before Opening a HELOC
While it can be tempting to open a HELOC now because of the lower interest rates, it’s crucial to reflect on a few key factors before doing so. Taking time to evaluate these areas can help you make a confident, informed decision.
- Home Equity
Your available home equity determines how much you may qualify to borrow. Most lenders require at least 20% equity in your home and typically allow you to borrow up to 80% of your home’s value.
- Credit Score
A credit score of 600 or highergenerally improves your chances of approval and helps you qualify for better rates. If your score could use a boost, paying down existing debts or making consistent, on-time payments can make a difference.
- Debt-to-Income Ratio (DTI)
Your DTI compares your monthly debt payments to your gross income. Lenders typically look for a DTI of 50% or lower. Reviewing this ahead of time helps you understand your financial picture and improve your approval odds.
Talk to Heartland Credit Union Today
Open a HELOC this November for a smart financial move—but remember it’s not one-size-fits-all. Everyone’s financial journey looks different, and the right choice for you depends on your unique goals and situation.
At Heartland Credit Union, we’re here to help you make confident financial decisions. Contact Heartland Credit Union to help you make the right financial decision about opening a HELOC.
