Home Equity Line of Credit: What are the Advantages?
Various programs allow you to access cash for your mortgage or other uses. One such program is the Home Equity Line of Credit (HELOC). This program gives you access to cash when you need it. This article talks about this program and the advantages of using it.
The HELOC Program
At times, you need a lumpsum amount that you can access only when necessary. The need might be college tuition, medical expenses, periodic home repairs and vehicle maintenance. These needs require you to take out a small amount of cash depending with the magnitude of the problem.
HELOC is set up as a revolving line of credit, with a maximum amount that you can withdraw. You can take out the cash using a special credit card or by cheque. This comes with several advantages.
Get Cash when You need it
The program gives you access to cash when you need it, which is ideal for unexpected projects.
Lower Interest Rates
You only pay interest on cash used. For example, if your HELOC amounts to $50,000 and you take out $10,000, you only pay interest on the $10,000. This is different from normal loans, where you pay interest on the whole amount.
Lenders consider this to be a mortgage because you secure it using your home equity. Therefore, the lender gives you the loan at lower interest rates, usually 2 percent above prime rate.
No Closing Costs
You don’t need to pay for closing costs for most HELOC programs. This saves you a lot of cash.
Do you need Our Help?
With fluctuating home values, lenders are picky when it comes to approving HELOCs. But don’t worry, because at Centex Capital we know lenders who are ready to offer HELOCs depending on your needs.
Contact us for more information. Email us or call now (800)842-2910.