How We Can Help You With Your Home Equity Line of Credit

We specialize in many different types of mortgages at Intercoastal Mortgage Company to get you into the house you desire; we also originate second trusts and home equity lines of credit. Many of you have more than likely heard the term, but are you aware of just how available it may be to you? You can't use a home equity line of credit (HELOC) on its own to purchase a house or for proof of funds, but it may be helpful to show you have available credit and your payment history. In this blog I discuss what a HELOC means to you and how you can use it to get into the house you want, pay for your child's education, or add that addition onto your house.

So what is a HELOC, and how does it work? A home equity line of credit is a loan from a bank or other lender, which has an limit amount determined by the equity in your home. Yet, this type of loan differs from others significantly. Some specifics and guidelines involved:

·         The lending institution establishes the amount of the loan based on the equity in your home. Rather than giving you a check for the amount, they make the money available to you like a credit card

·         Payment of the amount taken from the line of credit is made monthly. Payments are  based upon how much of the loan you have used plus an added amount of interest. While there may be a minimum monthly payment, you are only repaying on the amount you have taken from the account.

·         The interest rate on a home equity line of credit is usually variable. It can change over time because it is based on an index such as prime rate

·         While there are monthly payments, the loan has a period over which the entire principal  must be repaid

·         A home equity line of credit can be used by the borrower for whatever purpose they deem necessary

·         At the basis of the home equity line of credit is your home. So, just like a mortgage, failure to pay can result in foreclosure

·         A Home Equity Line of Credit can be very useful to a homeowner and in some instances the interest is deductible from your income tax.

The best time to apply for a HELOC is when it isn't needed. It will be available to you as credit should you ever need to borrow from it. With that being said, it’s also an available option if you come to a point where you do need a large sum of money fairly quickly. It is also great for help purchasing a house (mortgage down payment) and we specialize in this. Contact me to see if your home equityline of credit can be used to get you into the house you desire.