Why would I want a Home Equity Line of Credit Mortgage
You may consider a HELOC if you need to borrow money, but aren’t entirely sure of the amount you will need. HELOCs are different from other loans because they do not offer the lump sum up front. Instead, a HELOC is like a credit card that has a pre-determined positive balance. You may use any amount of the HELOC you need, as long as it does not exceed the amount you borrowed of course, at whatever time you need it. At the end of your pre-determined “draw period,” you only pay back what you use plus interest.
What can I use a Home Equity Line of Credit for
Many people find HELOC helpful for unforeseen, but unavoidable circumstances. If your home needs to be treated for dry rot, or some other highly expensive, but necessary situation, a HELOC may be a solution for you.
Why should I get a Home Equity Line of Credit
The interest rate on a HELOC is based on an index such as prime rate. Prime rate is offered to borrowers with very good credit, and varies among banks. Your interest rate will most likely change over time, which can work for you if the interest rate declines.
How can I get a Home Equity Line of Credit
If you think you want to apply for a HELOC, you can do so right now. Click here to begin.
How can my FICO/Credit Score effect my Mortgage Rate
Good credit is essential to having a good mortgage rate. If you score between 720 and 850, you qualify as A-paper. If you score below 660, you will probably have trouble finding a lender that will work with you. The cut-off between A-Paper and Sub-Prime or Non-Prime lending is 620.
Q: What is the underlying collateral in a Home Equity Line of Credit?
A: The collateral is your home. Therefore, it is important to meet all terms of the loan, including repayment, or you may find yourself in foreclosure.
Q: How do I repay a HELOC?
A: You will most likely have to pay a minimum monthly requirement, but it will probably be interest only until your draw period is over. After that, you may pay off the principal in a lump sum, or according to an amortization schedule.
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