A home equity line of credit, also known as a HELOC, gives homeowners the financial flexibility they need to tackle large expenses. If you have equity in your home, MortgageDepot can help you explore HELOCs to determine if these programs will help you reach your financial goals.
What Is a Home Equity Line of Credit?
A home equity line of credit is a revolving source of preapproved funds backed by the equity in your home. A HELOC operates like a credit card, except you are borrowing funds from your investment. You can access HELOC funds when you need them during a specified draw period.
HELOC programs consist of two phases:
Draw period: During the draw period, the borrower can access available credit as needed. Generally, they will pay manageable, interest-only payments during this time frame. The draw period typically lasts ten years.
Repayment: The repayment period usually lasts 20 years. During this time, the borrower cannot access their credit. They are responsible for principal-plus-interest payments until the loan balance is satisfied.
If you have a mortgage in Pennsylvania and need financial liquidity, MortgageDepot can help you secure a HELOC to ease the burden of an overwhelming expense. Here are some of the benefits that a HELOC offers to our clients:
A HELOC has minimal or no closing costs.
HELOCs often have lower interest rates than other types of loans.
In some cases, the interest paid on a HELOC is tax-deductible.
Interest isn’t charged on undrawn funds.
Borrowers can use HELOC funds at their discretion.
A HELOC can provide emergency funds during financial hardship.
Qualifying For a HELOC
To qualify for a HELOC, borrowers must owe less than the value of their home. Lenders will also consider credit scores, employment history, current income and outstanding debts.
Our loan officers at MortgageDepot are experts in HELOC programs in Pennsylvania. If you think that a HELOC is a smart financial move, we will help you determine your eligibility and guide you through the application process.