Home Equity Line of Credit (HELOC)
A HELOC is a lot like a credit card. It is a revolving source of funds a borrower can draw from up to a set credit limit. Again, much like a credit card, you are required to pay interest monthly on the aggregate balance drawn. HELOCs do not have a set amortization schedule.
Up to 65% of the purchase price or appraised value of the property may be borrowed with a HELOC. However, if a HELOC is combined with a Mortgage, the combined amount can go up to 80% of your home's value. The additional 15% is an amortizing portion. This means, it must be repaid in regular monthly instalments, similar to the payments on a regular Mortgage.
About The Author
Don Scott
Don Scott is the founder of a challenger mortgage brokerage that is focused on improving access to mortgages. We can eliminate traditional biases and market restrictions through the use of technology to deliver a mortgage experience focused on the customer. Frankly, getting a mortgage doesn't have to be stressful.
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