A Home Equity Line of Credit (HELOC)

A Home Equity Line of Credit is like a credit card. You can borrow money up to your credit limit, and you only get charged interest on the portion that you borrow. You can pay down the balance, then reuse the credit. Most have a draw term, usually 5 to 10 years, where you can draw money out, then the loan is paid back over a 10 to 15 year period. You may also elect to refinance the Equity Line and get another 5 to 10 years to use the line of credit.

You choose what you want to do with your home equity line of credit:

Remodel your home
Take a vacation
Consolidate bills
Buy a car, boat or RV
Finance tuition or other expense
Use it as an emergency fund

There are many features of HELOC loan programs. Ask your Loan Officer to help you decide which is best for you.

Great Rates: rates can be below the prime rate on some programs.
No Loan Fees: No appraisal fee or closing costs.
Convenient Closings: Some programs allow doc signing in your home.
Credit lines or maximum loan limits vary with each program.
Pricing varies with the LTV.
Accessing the cash in your credit line can be done by writing a check, charging on a credit card or making a withdrawal at a financial center.
Many of these programs have an early termination fee.
Some programs may offer a fixed rate loan option feature, where you can lock in a fixed rate on all or a portion of your outstanding balance.
Pricing is based on your Credit Score. These cutoff limits are fairly strict, so if your score is just below the next higher range, you may want to discuss how to improve your score with your loan officer.
A HELOC is usually 100% tax-deductible*, and a smart way to consolidate debt, pay for home improvements, new automobiles, student loans or even vacations or weddings.


Home Equity Fixed Rate Loan
You may prefer a home equity fixed rate loan compared to a HELOC. Home equity fixed rate loans offer a wide variety of amortization periods (length of time to pay it back), more choices for people with less-than-perfect credit, fixed rates so your rate can never go up and the interest paid may also be tax-deductible*!


* It is recommended that Customers consult their tax advisor. Not all loan fees or interest payments are tax deductible.

Home equity line of credit: Keep it or not?

Home equity line of credit: Keep it or not?: "It's time to consider whether to keep your home equity line of credit or get rid of it.
Rates on credit lines have been rising for a year and a half. Meanwhile, long-term mortgage rates have been falling for a month and a half. This up-down combination gives borrowers a chance to pay off their credit lines with other types of loans.
To decide whether it makes sense to ditch your credit line, you have to do some math and think about the price you're willing to pay for the flexibility of having a credit line.
If the math in this article makes your head hurt, you can ask a mortgage broker or loan officer to crunch the numbers.
Home equity lines of credit, known to mortgage geeks as HELOCs, usually go up and down with the prime rate. The rates on credit lines used to be 2 percentage points lower than rates on 30-year, fixed-rate mortgages, but now they're about 1 point higher."

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