Home Equity Lines of Credit, What are they?
Your Home Equity Line of Credit or HELOC for short, is a loan secured against your home or rental property. Because Lenders use your property as collateral they are provided with increased security which lowers their risk. Lower risk to the lender results in lower interest rates to You.
Your Home Equity Line of Credit is a revolving credit product, this means your available balance can be borrowed, repaid and borrowed again. Your Secured line of credit will likely have no set payments requiring that you only repay the interest accrued on the funds used.
Why Make Interest Only Payments?
- Rental Property down payment – Helps to keep a positive cash flow while your new investment property gets going.
- Renovations –Making interest only payments allow for much smaller payments than loans making beautiful renovations possible.
- Job Loss– Repaying only interest on funds needed to bridge the gap while you look for your dream job.
- Emergency– Having the lowest possible payments can make all the difference during an emergency.
Common Uses for Home Equity Lines of Credit
- Down payment on an investment property
- Down payment on a vacation home
- Consolidating higher interest debts to save money
- Consolidating debts to lower overall monthly obligations
- Home renovations
- Property maintenance
- Emergency funds
A Few Differences Between Products
- Fixed limits VS limits that automatically increase as you pay down principle on your mortgage
- Payments that automatically drawn from your desired account VS manually making payments at your convenience
- All in one Product with your mortgages VS stand-alone home equity lines of credit
- Interest Rates
Benefits of Home Equity Lines of Credit VS Fixed Loans
- Lower Interest Rates
- Lower Payments
- Funds are re advanceable
- Flexible Terms
- No restrictions on what the funds are used for
- Lower affect on borrowing power than fixed loan payments
Many of our lenders offer Home Equity Lines of Credit each having unique products. Discuss the available options with your mortgage professional.
Selecting the right product is a major factor when looking to gain an edge and take control of your finances.
Agent with Dominion Lending Centers the Mortgage Source
613 558 1143