News

For homeowners looking to fund a major project, consolidate debt, or create greater financial flexibility, tapping into home equity can be a powerful solution. According to Jolita Swanson, Senior Personal Banker at First Federal Bank, there are two primary ways to access that equity: a home equity loan and a home equity line of credit (HELOC).

“The home equity loan is a fixed loan,” Swanson explains. “You get the whole amount all at once, and it’s typically over a 10-year period with a fixed rate and monthly payments of principal and interest.” Because the funds are distributed upfront, this option is ideal for larger, one-time expenses such as home renovations, installing a new roof, or consolidating high-interest debt into one manageable payment.

A HELOC, on the other hand, offers more flexibility. “A HELOC is a line you use when you need it, pay it off, and use it again,” Swanson says. “You might not use it for a year, and then something comes up and it’s there when you need it.” She compares it to a credit card, where borrowers only pay interest on what they use. This makes it a great option for ongoing projects, unexpected expenses, or simply having a financial safety net in place.

Beyond flexibility, one of the biggest advantages of home equity products is the potential for lower interest rates compared to credit cards or unsecured loans. “The rate tends to be much less than a credit card,” Swanson notes. “It’s a smarter way for many people to access funds without taking on higher-interest debt.”

For many homeowners, the most impactful use of home equity is debt consolidation. Swanson recalls working with individuals who felt overwhelmed trying to keep up with multiple payments. “Those are the most memorable situations,” she says. “When we consolidate someone’s debt and save them six or seven hundred dollars a month, you can just see the relief.”

She adds that the transformation is immediate. “They go from feeling like they’re drowning to feeling like they have a fresh start,” Swanson says. “At closing, when we’re paying off all those debts for them, it’s exciting because you know they’re walking away with less stress and a clear path forward.”

Swanson emphasizes that choosing the right option depends on each homeowner’s unique situation, including the size of the project, available equity, and long-term financial goals. That’s where working with a local lender can make a difference. “We sit down with our customers, walk through their options, and help them find what makes the most sense,” she says. “It’s a very personal, one-on-one experience.”

To learn more about home equity loans or HELOC options, visit bankfirstfed.com/homeequity, or stop by your local branch to speak with a personal banker.