There is sometimes a misconception about Home Equity Lines, most common being “I don’t need the money right now why would I set up extra financing?” If you are a home owner and have built up your equity over the years, you have earned the right to have access to that money should you ever need it. Whether you need the money right now to consolidate debts or you are simply setting it up for a rainy day, a Home Equity Line of Credit (HELOC) is never a bad option and here’s why:
You only pay for what you use. You will not be paying any interest to have it open and available to you. Setup costs are also very inexpensive.
Unlike a fixed term mortgage, it is revolving. If you were to use your Home Equity Line in place of a
mortgage or for whatever reason you may need it for, as you pay down your principal that money once again becomes available to you. Just like a credit card except….
Way Lower Interest Rates – If you use your credit card often and find that you carry a balance from time to time, then you may as well save yourself some major points on the interest. Compared to a typical 18-21% credit card, a HELOC starts as low as Prime to Prime +1.00%. (Obviously higher in some cases depending on your qualifications)
Consolidating Your Debt. To further to the point above, if you are carrying debt on your credit cards and making the minimum payment every month at 18% interest. Then would it make much more sense to look into a HELOC and have one monthly payment on ALL your debts at rates drastically lower? The answer is unequivocally yes.
It’s there when you need it. You may not need your HELOC now; you may not need it tomorrow. But life can come at you quick and one day you may need access to a large sum of money in a pinch. Rather than waiting until this happens and having to scramble to get approved and go through the closing process, why not set it up before you need it. Remember, you don’t pay a cent on the money you aren’t using. You would be amazed how many times clients have contacted us after thanking us for setting up their HELOC.
It can help you manage your budget, investments and cash flow. Knowing how to make your money work for you is a valuable skill and can make all the difference to your future. You may have an investment opportunity that can NET you $100,000 for example in a year or two from now. But you don’t have the capital on hand to make that investment. Being able to use your HELOC and making the payments on there for that time period at the low interest rate can make the difference between you cashing in or staying where you are. Now, we are not suggesting you go and use borrowed money recklessly, investments come with risk and you should speak to a professional before making a decision like that. We are simply suggesting that a Home Equity Line can prove valuable in instances such as this one.
So there you have it, people. Still not sure? Visit for some more information on the product and of course, feel free to contact us with any questions you might have.