The Home Equity Line of Credit (HELOC), is a convenient method to easily access the equity of your home.
Most often the monthly required payments are “interest only” which provides some relief during months of strained cash flow.
Borrowing against your home is one of the cheapest sources of credit. The cost of a HELOC is some where between the cost of a 5yr fixed mortgage, and a 5yr variable rate mortgage, so there is a little additional cost for the flexibility of payments, and access to the funds.
A few things to consider when obtaining a HELOC:
- The charge on the title is a collateral charge, and is in the amount of (or possibly more) then the available credit – please discuss with your Mortgage Advisor.
- Some lenders will report on your credit bureau, and a high balance with respect to your available credit is very detrimental to your credit score – please discuss with your Mortgage Advisor.
- Interest Only payments require a tremendous amount of discipline to actually pay down the HELOC