What is a HELOC Loan?
Here are a few buzzwords that are thrown around in the home
lending industry often. You my hear of a HEL or a HELOC.
HELOC is just the short form of Home Equity
Line of Credit meaning an open-end line of credit. A home
equity line of credit (Heloc) is a revolving line of credit
with an adjustable interest rate
which is indexed to the prime rate. Another form of a Heloc
is a fixed-rate loan that allows you to leverage the equity
in your home into cash, refinancing or to consolidate debt.
Home equity lenders give you a line of credit up to 85% of
your appraised homes value, minus the current mortgage loan
balance. This of course is decided on your credit and your
amount of debt.
What can a Heloc do for me?
You can get a loan at a lower interest rate than other loans
and be able to get cash to use the way you want:
Benefits of the HELOC loan
- Low Interest Rate
- Large sum of cash to spend, A HELOC is normally considered
the cheapest source of cash
- Different ways to access your line of credit including
checks or credit cards
DisAdvantages
of the HELOC loan
- You must use your home as collateral
- Large final payment, ballon payment
- Could put you more in debt if you do not plan ahead
Click
here to Compare HELOC Lenders
Comparing Rates with HELOC. Home Equity Line of Credit is
the rate on open-ended lines of credit based on a $10,000
line, or on the minimum to borrow if it is above $10,000.
The LTV is 80%. Introductory rates may be included, but only
if the introductory rate applies to a $10,000 credit line
or to the minimum line offered if it is above $10,000. Home
equity loan (HEL) is a 60-month fixed rate, fixed term secured
loan based on a $10,000 loan or on the minimum to borrow if
it is above $10,000. The LTV is 80%. A lien must be placed
on the property for this type of loan.
What if i have
bad credit?
More about HELOC
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