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What's A HELOC? A Home Equity Line of Credit (HELOC) is a line of credit secured by the equity that you have in your home. With a HELOC you can plan a vacation, add an addition to your home, consolidate bills or finance a college education. There is a predetermined limit that will allow you to write yourself a loan whenever you need it. You can use the money for whatever you need and payment are baed only on the amount of funds drawn. How does it work? A HELOC is a form of revolving credit. The account has a predetermined credit limit. Whenever you need money, you use either a special check or other means to access the funds. The next month you recieve a statement showing how much you owe. Payment is based solely on the amount drawn, not the entire amount of the credit line. Why should I get a HELOC? HELOC's are usually tied to the prime rate so current rates are often very low. Payments are typically Interest Only for a specific time, so the payments are low too. Unlike credit cards and personal loans, HELOC payments may be tax deductible (consult your tax advisor). HELOC's provide money on demand for emergencies, home repair, tuition, and much more. Many people use their HELOC's to pay-off other debts with higher interest rates, because of low rates and tax advantages. Who can get a HELOC? Any homeowner with resonably good credit can qualify for this type of loan. Those who qualify may be eligible for credit lines equal to 100% of property value (less any outstanding mortgage) without having to pay mortgage insurance. We consider all applications, including those with past credit difficulties.
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