In today’s homeownership tips bloge you’ll what is a home equity line of credit and the 5 most common reasons homeowners use them.
The best source of any home loan product is your local trusted loan officer.
Home equity line of credit explained.
A home equity line of credit aka HELOC is essentially a type of loan that borrows against your home equity. At least one of the reasons a homeowner opts for this form of credit is due to the the fact HELOC interest rates are typically less than a home loan refinance, credit cards, and/ or other forms of credit available to you.
If you’re approved for a HELOC loan, a lender extends you a line of credit for certain number of years. You can borrow money up to your maximum credit limit (home equity) for the first loan period, usually about 10 years making the only the minimum payments. After the borrowing period ends, you must repay the loan in full, normally over 20 years. In short, it’s like having a second “mini home loan” on your property.
See current HELOC rates: https://www.bankrate.com/finance/home…
Depending upon where you live and the financial institution you prefer the home equity line of credit my simply be referred to as a home equity loan or HELOC.
If you’re watching this blog, it’s probably pretty safe to assume you’re exploring your homeownership options and what’s available to you and the things homeowners should know.
Just like any other form of credit, one is wise to weigh the pros and cons before jumping in by assessing why you need or want a new form of debt to repay.
Here’s a quick equation to estimate your home equity:
Appraised Value – Current Mortgage Balance = Home Equity
5 Common Uses of a HELOC include:
1. Home renovation projects
2. Lower interest rates on credit
3. Debt consolidation
4. Paying for Higher Education
5. Expensive purchases
At the end of the day, it’s your home and your hard earned money on the line. Definitely be clear on your reasons why you may choose this loan product and fully understand the upsides and downsides of this and all other forms of credit.
If you want to know more about homeownership or have ideas for more home owner tips, please let me know. If you’re curious about home equity line of credit Las Vegas, please let me know, I’m happy to introduce you to great local loan officers to further assist you.