Are you in a place where you feel you need additional cash flow and desire to make home repairs or consolidate down any debts? Or, do you fear that the needs of your current financial picture will only drive debts higher? There may be a solution for you. Consider using a Home Equity Line of Credit (HELOC). With a HELOC, you can draw funds as you need them, similar to using a credit card, but from your home equity. Professional Mortgage Solutions of Rego Park, NY is here to tell you about the pros and cons of using a Home Equity Line of Credit (HELOC).
Using a Home Equity Line of Credit (HELOC)
As you enjoy owning your current home and watching it gain value over time, it can be hard to wait to benefit from the windfalls of selling your home for profit. In addition, unexpected home issues or life events can occur that change your financial plans. Using a Home Equity Line of Credit (HELOC) allows you to create a second loan on the home value above what you currently owe on the primary mortgage. There are many reasons to use a HELOC, and the bottom line is, using one should only benefit you. However, there are always risks for rewards. Progressive Mortgage Solutions can help you weigh your options.
The Benefits of Using a Home Equity Line of Credit (HELOC)
When taking on a second mortgage, one can use a home equity loan or line of credit. The clear benefit of using a line of credit is that you only draw it down if you need it, as opposed to committing to a set loan amount. Some suggest that you should pursue HELOCs for the benefit of increasing the value of your home. You can try and negotiate a fixed or adjustable rate, and even make interest-only payments for certain lenders. You can make some pretty impressive repairs, especially since some lenders will let you borrow up to 85% of the home value. It may be a good idea to pursue a HELOC before you go to sell your home.
The Risks of Using a Home Equity Line of Credit (HELOC)
Be sure to speak to an expert before using a HELOC, Professional Mortgage Solutions is here to help when you need. With a HELOC you are using your own home as collateral. One risk is that you will overextend and use the credit for long-term needs. In this case, you need to ask yourself: when will the credit/debt cycle ever end? How can I sell my home and handle two mortgage payments? Some HELOCs will also come with variable interest rates, meaning interest charges could spike.
Progressive Mortgage Solutions has a great team in Rego Park, NY ready to help you understand how to benefit from a Home Equity Line of Credit (HELOC) or other type of mortgage financing. Contact our team today!
