A home equity line of credit or HELOC (as it is mostly called) is a line of credit where your house’s present market value is used as collateral or security.
Have no idea when are you eligible for HELOC? Mortgage Merchant can tell you this. To decide a line of credit, you should have 20% or more equity in your home. This set line of credit can then be used for anything like renovating your house, education purpose, investment, vacation or debt consolidation. HELOC uses not more than 65% of your home’s value.
The interest-only period in HELOC is 5-10 years during which you’ll only pay interest on the loan. The interest-only payment is withdrawn from your account automatically on monthly basis. After interest-only period is completed, the credit limit changes to amortizing credit limit. You can even extend your interest-only period by applying again at the end of interest-only period.
Get more information on HELOC by speaking to our mortgage broker.