A HELOC stands for Home Equity Line of Credit. This line of credit loan is based on the equity you have built in your home. In other words, it’s the difference between what your home is worth and what you have left to pay.

Review the Following Example to Understand Your Home’s Equity:

Home Value $250,000
Amount Owed on Home $200,000
Equity $50,000

In the above example, you owe $200,000 on your home but it appraises at $250,000. This means you have $50,000 of equity in your home. At Money Federal Credit Union, we will lend up to 90% of the equity you have. In this scenario, you could borrow up to $45,000.

If you want to know a rough estimate of the value of your home, you can use a site like Zillow to get a general idea.

Check Your Home’s Value

Using Your Home’s Equity

Once you obtain a HELOC, you can use the credit line for just about anything. For example, if you’ve been dreaming about adding a pool or updating your kitchen, a HELOC could easily fund those projects. Plus, many times these improvements could further increase the value of your home.

You are even able to use the equity to consolidate high-interest credit cards you’ve accrued or pay for your child’s education. The options are endless. Plus, since HELOCs are secured loans, the interest rates are typically much lower than unsecured loans (i.e. Personal Loans or Credit Cards).


HELOC vs Home Equity Loan

A HELOC is a line of credit. This means you will have access to the funds as you need them. With a HELOC, you only pay back what you use of your line of credit. Think of it as a credit card. If your approved credit card limit is $10,000, but you only spend $1,000 – you only have to pay back the $1,000 (the other $9,000 is still available to use if and when you need it up to 10 years).

In contrast, with a Home Equity Loan, you’ll receive the full loan amount up front in one lump sum and you’ll have set monthly payments to pay back the loan.

Both options offer different benefits. For example, if you have ongoing repairs or expenses, the convenience of borrowing as needed with a HELOC may be the best option. If you are putting in a new pool and know the upfront cost, a lump sum Home Equity Loan may work best.

We’re Here to Help!

If you’d like to learn more about Home Equity Loans or would like to apply for one, call, chat, text, or stop in! (315) 671-4000, Monday-Friday, 9am-4pm. Our Home Loan Experts are ready to help! You can also find more information on our Home Equity Loan page.


Each individual’s financial situation is unique and readers are encouraged to contact the Credit Union when seeking financial advice on the products and services discussed. This article is for educational purposes only; the authors assume no legal responsibility for the completeness or accuracy of the contents.