Home Equity Line of Credit
How does a Home Equity Line of Credit work and are they a product that works for your situation.
If you have enough equity in your home you may be able to access a home equity line of credit. This type of product is secured against your property. It will show up on your title as a mortgage type charge. They are reusable. You pay on what you owe and in most cases can pay only the interest amount each month or you can pay out the entire amount. They are on a floating variable rate. Many clients find the flexibility of the product to be very advantageous.
A home equity line of credit is different from a mortgage as once you pay off the balance the credit limit remains. The line of credit only come off your title when you make a request with the lender.
They are a great product for anyone who wants to invest in revenue property. If you have available limit you can use the line of credit funds for a down payment on the revenue property. The same goes when purchasing a second home. The line of credit can also be used for other investments or any purchase you choose. Because it is secured against your home the interest rate is generally better than an unsecured loan or other loan type. If you are considering refinancing your mortgage this product might be good for you! It can also be implemented instead of a regular mortgage when purchasing a home.
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