What Is a Home Equity Line of Credit?
A HELOC is a secured borrowing tool that allows you to use up to 65% of your home’s value in the form of revolving credit. Much like a credit card, you may borrow up to a maximum credit limit, make monthly minimum payments, and borrow again as you please. You can use the loan for renovations, debt repayment, post-secondary education costs, and more. It is your home, use as much or as little of its equity as you please. Get in touch with our team for more information.
How Do I Get a Home Equity Line of Credit?
Today's Mortgage Choice makes getting an equity line of credit more accessible than ever. If you’re considering applying for one, we can help you get your documentation in order.
There are specific criteria you must meet to qualify. You must be able to provide:
- Proof of full-time employment
- Good credit score
- Minimum 20% down payment or 20% home equity
To find out if you meet the requirements, get in touch with the experts at Today's Mortgage Choice.
How Does a Home Equity Line of Credit Work?
A HELOC takes from a home’s equity, thus holding the property as collateral if the borrower defaults on repayment. For this reason, interest rates are generally low, as it is considered a low-risk loan for lenders.
To be approved for a HELOC, lenders will generally require the following for confirmation:
- Deed of ownership
- Mortgage balance and loan term
- Amortization period
- Home valuation assessment
What Is the Difference Between a Home Equity Line of Credit vs. Mortgage?
Mostly, homeowners use a HELOC in combination with a mortgage to make the most of their home investment. Otherwise, they would not be able to access their home equity before they sell the property for profit. In this scenario, the more you pay off your mortgage, the more credit you can unlock.
Alternatively, if you’re wondering whether a HELOC or a mortgage is a better financing option for you, book an appointment with our specialists to weigh the pros and cons of each. If you require more payment flexibility, a HELOC is your best bet.
Is it Better to Get a Home Equity Loan or Line of Credit?
Both a home equity loan and line of credit pull from the value of your home. However, there are significant differences to consider before deciding which one is best for you. Here are a few key differences:
- Lump-sum loan
- Up to 80% of your home’s value
- Interest on the whole amount
Home Equity Loan
- Flexible, recurrent borrowing
- Up to 65% of your home’s value
- Minimal interest on the borrowed amount
HELOC
We’ll be able to give you more information to help guide your decision during your consultation.
Discover the Best Line of Credit Rates with Today's Mortgage Choice
With the right guidance and discipline, you can enjoy superior financial freedom with a home equity line of credit. Get in touch with us now at (888) 418-6979 to get started.