HOME EQUITY LINE (HELOC)
A HELOC is a type of home equity loan used for a variety of purposes. Some examples include:
Pay for a vacation
Home improvements or repairs
In a closed-end second mortgage, you borrow a set amount against the equity in your property and receive the equity proceeds in a lump sum at closing. Your monthly payment is based on the full loan balance from the first payment through the entire term of the loan.
A HELOC is a line of credit against your property. After appraising your home, the lender will determine the maximum equity line that you are eligible for. You can choose to leave the line of credit untouched and have it available to you for the future or use the checkbook or debit/credit card provided after closing to withdraw as little or as much as you need up to the loan limit that you were approved for. There is no restriction on what you use the money for, and most equity lines offer an interest only payment during the first ten (10) years of the loan. You only make payments on the portion of the line that you have withdrawn during the initial draw period, typically ten (10) years. The balance at the time the draw period ends is then paid back at a fixed monthly amount over a set period of the remaining term, typically 20 years.
Contact us today to find out. After reviewing your finances, we’ll be able to help you decide if a HELOC is the right loan for you. We promise to be transparent throughout the process and keep you informed every step of the way.
NMLS #1377835 | CA Department of Real Estate - Real Estate Broker - DRE #01979670