Having access to cash when you need it can benefit you in a variety of ways. Whether you need to make an emergency car repair, renovate your home, or need money because of a job loss it is a comfort to know that you won’t be left without the funding you need.
One of the ways that you can ensure that you will always have cash available when you need it is to have a home equity line of credit.
What is a home equity line of credit and how does it work?
A home equity line of credit (HELOC) is a revolving line of credit that is secured using the equity in your home. Most lenders will allow you to borrow up to 80% of your home equity in this way. So – if your home is worth $500,000 and you have $200,000 still owing on it, that means you have $300,000 in home equity and with a HELOC you can borrow up to $240,000.
A HELOC works in a way that is similar to a personal line of credit or credit card. In the case above, you would be given a credit limit of $240,000 and you could borrow up to that amount and only pay interest on the amount that you have actually borrowed. Once you pay the money back, you have the option of borrowing from it again.
The main difference however is that because a HELOC is a secured loan, the interest rates tend to be lower and you don’t need to have a perfect credit score in order to qualify.
How can a HELOC help you?
Even if you don’t need to borrow money right now, applying for a HELOC today will help you ensure that you always have access to cash when you need it. The money can be used for any purpose, but some common uses for HELOCs include:
● Paying for emergency expenses (car repairs, medical bills, etc.)
● Home renovations
● Start up capital for a business
● Paying for a child’s education
Contact AKAL Mortgages today
If you are interested in learning more about how a home equity line of credit can help you – or if you would like to apply for one – contact AKAL Mortgages today.
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