Feb. 24, 2022

This paid piece is sponsored by Central Bank.

When Corey Herding’s daughter was in the market for a first house, he realized he was in a good position to help her out.

“The way the housing market was we had to do some unique things to be able to get her a house,” he explained.

So Herding called his lender at Central Bank, which he has used both personally and for his business for about five years.

“My experience has just been fantastic, so we told them what we wanted to do, and they gave me the options available and had all the information they needed to get it going,” he said.

Herding opted to use a home equity line of credit to help his daughter through the homebuying process. About two weeks after he’d initially inquired about it, the bank had everything ready to go.

“We bought the house last March, and then we remodeled over the summer, my daughter got married, and they ended up buying it from us,” Herding said.

His experience illustrates one of many ways a home equity line of credit can work to a homeowner’s advantage, said Damon Punt, branch manager at Central’s 2500 S. Minnesota Ave. location.

“We have a steady need for these and a steady flow of customers coming in,” he said. “We see a lot of people coming in to do home improvements — in particular we’re seeing a lot of home offices — but you can use the funds for whatever needs you might have. It’s all about putting the equity in your home to work for you.”

And many homeowners are finding the strong housing market means they have access to increased equity.

“Your home value likely has increased, and absolutely that’s going to expand your equity and give you an opportunity to utilize that,” Punt said.

We asked him what else you can expect if pursuing a home equity line of credit.

What is the experience like applying for a home equity line of credit?

First, know that you’re going to be working with a very knowledgeable staff with many years of lending experience. We’re here to make the process as simple and efficient as possible. We’ll ask questions to determine your financial situation, financial needs and your fit for a home equity line of credit.

How long does the process generally take?

We try to make the application process as easy as possible. We will require some documents, including two years of tax returns and W-2s, two recent paystubs, a current mortgage statement and information about your home insurance. Sometimes, we are able to streamline the process, but generally expect it to take two to three weeks. To start the process, stop in and talk with one of our bankers, or start your application online at centralbankonline.com.

Is there an average amount people generally use for their home equity line of credit, or does it vary a lot?

It can vary greatly, along with how people use the line of credit. Typically, people use these for home remodeling or other home improvements. But, like the Herding family did, you can use a home equity line of credit for whatever financial need you might have. It’s that versatile – a relatively quick and cost-effective way to tap into the equity you have built as a homeowner and use as you need.

Your limit also will be based on a percentage of the equity you have established in your property. You will see the best rate for this loan at or under a limit of 80 percent of the value of your home, but we do have options that go beyond 80 percent.

Speaking of rates, what are they looking like?

Our home equity lines of credit are variable and tied to the prime rate. Indicators are pointing toward a rising rate environment, but we are running a promotion in conjunction with the Sioux Empire Home Show that will carry a short-term fixed rate. We also give rate discounts for automatic payments made from a Central Bank checking account.

How long do you typically have to repay?

These loans carry a 10-year maturity, meaning you can advance funds for the full 10 years while having a minimum payment obligation of only the interest that has accrued on the funds that have been advanced. When the loan matures, you have the option of either paying the remaining balance in full or possibly renewing the line after a 10-year period.

Ready to learn more about your options for a home equity line of credit? This is the time to consider it. Visit any Central Bank location, or click here.