Home equity line of credit explained
Advantages of a HELOC.
- Equity take-out: Get access up to 80% of your home's value.
- Low minimum payment: Generally interest only.
- Quick Access: Get access to cash whenever you need it*.
- No penalties: HELOC's are fully open and penalty free.
A HELOC gives home owners the ability to access the equity in their home whenever they need it. One of the main advantages of a HELOC is that it's re-advancable, this means that the unused portion of the line of credit is available at anytime without hassels.
Although an unsecured line of credit generally has an interest rate that is approximately 1% to 3% over prime, a home equity line of credit is usually at an interest rate of prime.
Can a home equity line of credit be refinanced?
Arguably, the most attractive feature of home equity lines of credit are the fact that they are completely open which means that you can pay them off at anytime without penalty. Whether you want to refinance your regular mortgage and make it a line of credit, refinance your line of credit for a larger limit or change your line of credit back to a regular mortgage, it doesn't matter - there are no penalties.