Line Of Credit
 

Also referred to as HELOC, a home equity line of credit is a line of credit that is secured by the equity in your home. One of the advantages of a HELOC is that you can access up to 80% of the appraised value of your home (and in some cases up to 90%). Most importantly the funds are re- advancable, this means that at any time you want, you can access to the unused portion of the line of credit.

How it works is, as your mortgage balance decreases your available credit increases. You can use the available credit for anything you want, renovations, investment opportunities, purchasing a vehicle or even taking a vacation.

Another important feature of the HELOC is that it is secured by your home, what that means to you is a lower interest payment. Unsecured lines of credit usually have interest rates that are 1-3% above prime, whereas the secured line of credit is usually at the prime rate. The HELOC also offers flexibility in your payments you can pay as low as interest only payments or as much as you decide.

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Can I refinance my Home Equity Line Of Credit?

One of the best features of the HELOC is that you can pay it off at any time without penalty because it is fully open.