How does a Home Equity Line of Credit work?
The main advantage of a HELOC is flexibility. Instead of taking a lump sum of money that you have to begin payments on immediately, you can use a HELOC as you go, avoiding paying interest on the entire amount if you’re not ready to use it all at once.
It’s also reusable, meaning that you can use the funds, pay it off, and use it again as many times as needed during the draw period. This eliminates the need to re-apply for funding.
Home Equity Line of Credit (HELOC), is a revolving credit line that is secured by your home and can be used for large expenses or to consolidate higher-interest rate debt on other loans. While there are a few different options for funding backed by your home’s equity, a HELOC provides a flexible way to access funds when you need them.
Credit cards and personal loans typically can come with a hefty interest rate, sometimes up to 20% or even higher. When thinking about your financial future, savings via lower interest rates can really add up over time. With rates often less than 10%, a HELOC can be a wise choice over these types of loans.
2 Our Home Equity Line of Credit product will adjust to a fixed rate after the 10-year draw period.