POST TAGSHELOC Debt Management
Blog posted On February 03, 2022
Charging expenses to your credit card may seem easy, but it can cost you more in the long run. Credit card interest rates are typically much higher than mortgage rates and maxing out lines of credit can be bad for your credit score. A good alternative to using your credit card is getting a Home Equity Line of Credit, or HELOC.
What is a HELOC?
A home equity line of credit is a revolving source of funds like a credit card. But unlike a credit card, a HELOC is linked to your home equity. When you withdraw funds, it comes from your home equity rather than your bank account. Your untapped funds (in your home equity) do not charge interest.
A HELOC is beneficial for many different reasons. It can help current homeowners put their passive equity to good use and potential home buyers purchase more expensive homes.
HELOC benefits for homeowners
HELOC benefits for home buyers
Types of HELOCs
There are generally two main types of HELOCs – a Piggyback HELOC and a Standalone HELOC. A Piggyback HELOC is taken out when you close on your original mortgage. One benefit of taking out a Piggyback HELOC is that it can help avoid mortgage insurance or nonconforming loans. However, you may not realize that you want or need a HELOC when you close on your original mortgage. In this case, you would want a Standalone HELOC. A Standalone HELOC can be a good option when you want to consolidate debt or renovate your home.
The All In One Loan™
Another HELOC-type loan is the All In One Loan™. The All In One Loan™ is our proprietary loan that can help you access your home’s equity whenever you need and help you fully own your home sooner.
How it works
The All In One Loan™ is the only mortgage in America that automatically recomputes interest every night over 30 years, provides you access to your equity for 30 years, is linked with a personal checking account, and charges your interest last – 21 days into the following month – giving you more time to reduce your principal to lower interest costs.
There are countless benefits that a HELOC can offer both homeowners and home buyers. If you would like to learn more about our HELOC options, contact us today.