They’ve used it to pay for college tuition or medical expenses, to cover a big-ticket purchase, or just to have a financial safety net in place. And over the past year when many have been hesitant to travel, lots of people in Central Illinois and elsewhere have used the equity in their homes to turn their own residences into oases of serenity and enjoyment.

“It’s incredible how many homeowners are putting in pools, hot tubs, things where they can entertain themselves at home instead of maybe going on trips,” says Jim Nichols, chief retail officer with Prospect Bank. “That’s what we’re seeing a lot of home equity used for, a lot of home improvements. It’s incredible how many people are putting money back into their home, because they’ve spent so much time there over the past year.”

Prospect Bank has seen it all since it was founded in Edgar County in 1873, striving then as now to help the members of its community realize the benefits of home ownership. And one of those benefits is known as a HELOC--short for home equity line of credit--which can provide immense purchasing potential for an untold number of uses, or simply set up a financial safeguard that can be accessed in the event of an emergency.

“It gives people a lot of spending power. And I think that gives people peace of mind, knowing they have it if something comes up,” says Nichols, who’s been in banking for more than 30 years. “Like a medical expense -- people have unexpected medical expenses from time to time, and we all know how expensive those can get. So to me it can be a peace of mind product.”

Flexible uses, superior rates

A HELOC allows people to tap into the financial equity in their homes, and use that money for just about anything. If a customer has $10,000 in equity in their home, for instance, they can take out a HELOC for that amount. They can use it all at once, a little at a time, or hold onto it--given that customers only have to pay back what they use, a HELOC can be as flexible as a homeowner needs it to be.

But that’s hardly the only benefit of a Prospect Bank HELOC. For the first seven years, customers can make minimum monthly payments covering just the interest, although they’re also welcome to make payments on the principle as well. And the interest rate is far superior to that on a credit card, which on average runs about 15 percent. Prospect Bank HELOCs carry variable rates based on a prime rate that’s at a record low of 3.25 percent, allowing Prospect to offer starting rates as low as 3.75 percent to qualifying customers.

And through the month of June, Prospect Bank is running a special on HELOCs: a 3 percent rate that’s fixed for three years, with waived closing fees--meaning no charge for the appraisal, flood search, equity search and other services that are a part of the process. No wonder some borrowers combine a HELOC with their first mortgage, and refinance the whole package to get a better rate.

“It allows us to determine what the borrower’s needs are, and what they want to accomplish,” Nichols says. “And those needs can be just about anything. You can have somebody who has a kid who’s going to college, and the parents have to come up with money to fund college expenses. We see a lot of people use it for that; they draw on it periodically as they need to for tuition, books, or housing expenses. We’ve seen some people buy cars with it. People can use their equity for big purchases like that, big vacations, or home improvements.”

Straight answers, no surprises

As a community bank, Prospect Bank prides itself on knowing its customers and their needs. Borrowers aren’t just numbers on piece of paper, but neighbors whom Prospect employees might run into at the hardware store. The homes they’re drawing equity from aren’t vague residences, but in many cases addresses on streets the loan associates are familiar with.

For customers, it all cultivates a feeling of confidence that they’re getting a financial product that’s right for them -- whether it’s a HELOC, a mortgage, or any other type of loan.

“I always take great pride in my ability to communicate to our customers what they can expect in the process, and advising them what the most appropriate things are for them,” Nichols says. “And I really truly believe that our lending associates, our loan officers, do the same thing. And I think that’s the most important thing we can offer to our customers: straight answers, clear communication, no surprises during the process.”

Interested in exploring what a Prospect Bank HELOC can do for you? Visit one of its nine locations across Central Illinois, including the main branch at 177 West Wood St. in Paris, call (877) 465-4154, or visit BankProspect.com for further information.

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