HELOC: What It Is and How It Helped Me

This post is sponsored by our friends at Summit Credit Union. We have personally used and trust Summit Credit Union for banking and mortgage needs!

A lot of homeowners aren’t familiar with HELOCs (Home Equity Line of Credit) and may not understand the benefits and flexibility that a HELOC can offer. A HELOC allows you to borrow against the equity you’ve built up in your home.

Home Equity

If you’ve been in your home for any period of time, or if you made a substantial down payment when you purchased your home – you likely have built up a large amount of equity by now. Equity is the difference between what your house is worth in today’s real estate market and how much you currently owe on it. For example, if your home’s present appraised value is $225,000 and your outstanding mortgage balance is $75,000, you have $150,000 of home equity.

How does a HELOC work? 

A couple years ago, my husband and I decided we wanted to build a new home. We found the perfect piece of land and started coming up with our plans for the home – but a big question was ‘how will we pay for this land?’. When it was time to officially purchase the lot, we reached out to Summit Credit Union to explore our options. One option was a land loan or construction loan and the other option was a HELOC. We had never even considered a HELOC for purchasing land.

The HELOC enabled us to pull the equity out of our existing home and allowed us to pay for the land. The closing costs were low and we were given a check for the amount of the land – so that we could purchase the land outright. Summit made this process completely easy and hassle-free!

There are a number of reasons that people may find a HELOC beneficial!

Reasons to take out a HELOC

  1. Home improvements
  2. Debt consolidation
  3. Emergency expenses

There are a lot of benefits to having a HELOC and it’s a smart way for homeowners to make the most of their home equity. With a HELOC, you have access to a pool of money and only borrow what you need when you need it. At Summit Credit Union, they allow you to borrow up to 100% of your home’s equity (maximum loan amounts apply) and you can lock in your balance to a low rate for a term of up to 15 years. 

Taking out a personal loan or using a credit card are also options – but often come with higher interest rates and longer lead times.

In many ways, a HELOC also works like a credit card, letting homeowners use the approved line of credit whenever they need it. Plus, if the amount you need comes in under the expected price, there’s no penalty. 

It was a huge relief to my husband and I to be able to purchase the land for our dream home without having to take on any additional debt. Summit made it so easy for us to take out the HELOC, pay off the HELOC and to then take on a construction loan. If you are looking to remodel your existing home, need your equity for emergency expenses or simply are looking to consolidate debt – I highly encourage you to contact Summit Credit Union and to find out what your options are. You are in good hands with Summit!


Contact Summit Credit Union’s Loan Department 

Visit their website
Call: 608-243-5000
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Summit is the #1 Mortgage Lender in Wisconsin1

Summit Credit Union is an Equal Housing Lender.

1The Wisconsin’s #1 Mortgage Lender designation is based on the number of loans originated in 2020, gathered from the Home Mortgage Disclosure Act data compiled annually by the Consumer Financial Protection Bureau. The results of the data were obtained through the Consumer Financial Protection Bureau’s website: https://ffiec.cfpb.gov/data-publication/modified-lar/2020. LEI: 254900NTAC4H10MGSU23.


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Madison Moms Blog is written by and for moms who live in the Madison Area. We strive to connect local moms by sharing personal experiences, fun ideas and useful information as well as promoting local businesses. Our community begins online, but doesn't stop there! We offer Mom's Night Out events, play groups and other opportunities to connect offline, with and without kids.

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