A HELOC is a home equity line of credit.

This type of loan is basically a line of credit secured by a second mortgage on a property. You can borrow a much as you need as long as you do not exceed the maximum loan amount. You pay interest on the outstanding loan balance and not the entire line of credit.

A Home Equity Line of Credit is an open ended mortgage, meaning a homeowner can withdraw and repay as often as he likes, up to the available credit limit. A HELOC works much like a credit card account in that respect. It differs from a credit card account in that a credit card account is an unsecured loan, whereas a HELOC is secured by the homeowner's property.

Usually, whenever you have a mortgage that is above 80% Loan TO Value, then the difference above 80% is usually a HELOC loan. For example, if you need 95% Loan To Value then your 1st mortgage will be at 80% Loan To Value and at a lower rate and the remaining 15% will be considered a 2nd mortgage and be a HELOC.

If you need a larger amount of money (tens of thousands of dollars), it may make more sense to refinance your entire mortgage instead of opening up a HELOC. Contact me today to discuss which option would be best for your unique situation.

If you carry large balances on high-interest rate credit cards, you might consider getting a HELOC with a much lower interest rate to pay off that credit card debt. Call me or drop me an email and we can discuss your specific situation.

A HELOC (home equity line of credit) is an excellent financing tool, for some borrowers. A HELOC is essentially a line of credit secured by a mortgage or deed of trust on your home. You only pay interest on the amounts you borrow on the HELOC. If you don't use any of the line of credit, then you don't make any monthly payments. You can draw from the HELOC by writing checks issued to you by the lender. Usually a HELOC is considered a second lien on your property.

It's important to be careful with HELOC'S. As any other type of credit they have a good use but one can end up spending too much with this line of credit. If you are paying off other debts such as credit cards & autos it might make sense to get a standard fixed rate 2nd mortgage where you get the lump sum at closing to pay off all debts and then you pay on that mortgage along with your first until it's paid off. You won't have the ability to pull money whenever you think you need it.

On the flip side of that, if you have income that comes in large quantities and is sporadic or not stable. This type of loan might be used as a cushion for the times in-between the checks.

If you are approaching the end of your HELOC promotional rate period, we highly recommend speaking with one of our Home Equity Line of Credit specialists about refinancing HELOC with a fixed rate second mortgage or mortgage refinance.

A HELOC is a far superior debt device than using a credit card or financing a car/boat/ RV purchase. One of the many advantages to using a HELOC is that the interest expense is tax deductible. Essentially you are saving 25-35% on every interest dollar as it is deducted from your income when you do your year end tax preparations.

Many HELOC'S today offer a credit card which can be used at your favorite stores and restaurants.

Usually the rate on the HELOC is the prime rate plus a margin.

A HELOC is traditionally based on the prime rate and a margin is added to reflect the true rate to be paid by the borrower. HELOC's may offer a initial lower rate (Teaser rate) for a specific time period. When the defined time period has expired the rate will adjust to prime + margin.

HELOC(s) or Home Equity Line(s) of Credit are very popularly used as the "20" in an "80-20" or 80/20 piggyback mortgage strategy.

A HELOC is a line of credit offered for a specific amount not unlike what is offered by a Visa or Master Card type credit card. The big difference is that the HELOC uses the borrower's real property as security for the amount borrowed. The normal credit card is secured only by the borrowers promise to pay. The additional security allows the lender to charge a significantly lower rate of interest on a HELOC compared to the unsecured credit card.

A Home Equity Line of Credit can also be used to purchase the property or as a first lien on the property. The HELOC can be used to payoff or consolidate debt, personal use, or just to have.

A home equity line is a revolving credit line tied to the equity in your home. Most home equity lines use the prime rate as a base for setting interest rates. For example, you hear lenders describe rates as prime + zero or prime + 1. This means the borrower will pay monthly interest according to the Prime Rate (lets use an example prime rate of 5.00%) plus a margin. In this case, prime + zero would equal an interest rate of 5.00%, or in the case of prime + one it would be 6.00%. Additionally, most home equity lines have interest only payments.


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