What is a HELOC (Home Equity Line Of Credit)? - Mainstreet Blog
Written by: Abby Randall | Financial Advisor | Brigden Branch
Are you thinking about doing some home improvements, going on vacation, or even putting in that dream swimming pool but unsure how to fund these improvements?
Have you thought of using the equity in your home to borrow at a low cost?
Let’s explore how this can work with a Home Equity Line of Credit (HELOC).
What is a HELOC?
A HELOC is an affordable and flexible way to borrow money using the equity and value you’ve built through owning a home and paying your mortgage.
With a HELOC, like a credit card, you are given a maximum amount you can spend from. You draw from that amount based on how much you need to use at a time. Funds are always ready to use.
A HELOC is typically a more affordable way to borrow funds because it is secured by you owning a home.
Instead of using a credit card, or other high interest rate borrowing product, the HELOC can be added to your Mainstreet account and be ready to use when the need arises for renovations, education costs, pay off more expensive debt, buy a new car, or other life goals.
How do I repay a HELOC?
You can pay as much as you want when you want, and the best part is there are no penalties! As you pay back the amount borrowed, this amount becomes available again for future use if they are needed.
What makes a Home Equity Line of Credit different from a Line of Credit?
A home equity line of credit is secured by your home which makes it less risky for the lender and they can in turn offer a lower interest rate to you.
What if I already have a mortgage, loan or line of credit?
You might already have your mortgage or other borrowing with Mainstreet or another provider and wonder can you apply for a HELOC? The answer is yes you can. When you meet with a Mainstreet Financial Advisor they will outline all the steps involved in applying for and adding a HELOC to your account.
I’ve paid off what I’ve borrowed in my HELOC. Now what?
If you’ve paid back in full what you borrowed from your HELOC – you can either close the product completely or leave it open in case a future borrowing need comes up which means you won’t have to apply for a HELOC or loan again in the future.
The best part is there is no interest being charged or payments that need to be made if you aren’t using the funds in your HELOC and maintain a zero balance.
Call your advisor or book a meeting online today to make an appointment to see how Mainstreet HELOC may help you in achieving your home improvement and other life goals!