When I got into real estate here in Denver one of the first things I realized was there were months with nothing and others with plenty. Home sales were good and bad, so I needed some kind of way to fill in the dips, valleys and smooth the road. A Home equity line did the trick. Here is somemore...
A home equity line of credit, HELOC, is a mortgage loan made to homeowners to be used on an as-needed basis. A lender, such as a bank, will approve a borrower for a specified amount based on the equity in their home and all the necessary paperwork is signed to authorize the loan.
The line of credit amount is available to the borrower and no interest is due until some or all the money is used. When the money is paid back, the line of credit is again available in full to the borrower.
The specifics of the repayment will depend on the HELOC lender. It may require interest only or it may require amortized payments of principal and interest.
The proceeds from a HELOC can be used to make improvements on the home or anything else such as medical expenses, college tuition or unexpected expenses or other liquidity issues.
Unlike personal credit card interest, the interest on a HELOC may be tax deductible. Your tax advisor will be able to let you know about your situation.
Rates and fees can vary widely on HELOC loans. Borrowers should shop around, compare and get recommendations before deciding on a lender.
The truth is that sometimes folks use HELOCs for other purposes. One might be to buy an investment property. Or do a kitchen update, or even add on to the house. One thing you cannot do is get a HELOC when your house is on the market for sale. SO make sure you reach out before so we can talk through your plans. CONTACT ME
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