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Home Equity Line of Credit – HELOC Revolving Credit Line

Access Ready Cash Whenever You Need It

Whether you’re planning on renovating your Windsor home, making a major purchase in Toronto, or taking advantage of investment opportunities in Ottawa, a home equity line of credit (HELOC) lets you borrow with flexibility and convenience. By leveraging the equity in your Ontario home, you will be able to secure a line of credit with an interest rate lower than most other unsecured credit products.

Depending on the amount of equity you’ve invested in your home purchase, less any outstanding debts registered against your property, you may qualify for a secured line of credit. This is instant money that you can use for anything you like and pay back as quick or slowly as you’d like.

Benefits of a Secured Home Equity Line of Credit (HELOC) Include:

Saves you money:

  • Using the equity in your home may result in a lower ‘secured’ interest rate, and a higher credit limit.
  • Make interest payments only on the funds you use, not your total credit limit.

Convenience:

  • Apply once and it’s set up for your future use.
  • Reusable even when it’s been fully paid; you won’t have to reapply.
  • Easy access to your line of credit funds.

Even if you’re not sure how much equity you’ve invested in your Ontario home, you can contact your Windsor Mortgage Centre specialists for a free consultation. We’ll sit down with you to analyze your current situation and discuss your options. Located outside Windsor in London, Toronto, Ottawa, or Thunder Bay? No problem! We can evaluate your situation over the phone, through email, or even through a video conference on Skype or Google+ Hangout. Plus, we’ll do the legwork for you! We’ll assess your options then discuss the pros and cons of each with you in an unbiased fashion so you’re able to make an informed decision.

Use your home equity for a HELOC secured revolving loan

Home Equity Line of Credit | HELOC Revolving Account
Life can be complicated enough – you don’t need complicated finances too. So why not simplify it all by combining your mortgage, loans and saving account into one? A home equity line of credit, or HELOC, may be the only loan you’ll ever need. Not only does it pay for your home, it also lets you take out money for renovations, a new car, a child’s education, or whatever else may arise!

Slightly Higher Interest Rate, But Pay Less Interest in the Long Run

Since a home equity line of credit – HELOC is a secured revolving credit line, you can pay down your debt as aggressively as you’d like! Although a home equity line of credit typically carries a variable interest rate which is tied to the prime rate and is usually slightly higher than 5-year fixed rates, by applying extra cash savings to your outstanding debt, you can save thousands in the long-run. And better yet, you always have the option to borrow back up to 80% loan-to-value (LTV).

Home Equity Line of Credit – HELOC Revolving Loan Benefits

  • Finance a new home purchase or use equity from current home
  • Must have at least 20% down payment for new purchase or 20% home equity in existing home
  • Interest only minimum payments
  • Completely open mortgage – Pay off home equity balance anytime without prepayment penalties
  • Revolving Line – Borrow up to 80% of your home equity at any time
  • Great for consolidating credit card and other consumer debts

Home Equity Line of Credit – HELOC Revolving Loan Drawbacks

  • Variable interest rate – typically 0.5% to 1.5% above prime – could rise
  • Option to pay interest only may prolong paying any principal of debt
  • Option to borrow up to 80% of home equity could encourage more consumer debt if not financially responsible

While there are some great benefits to a revolving home equity line of credit, it is important to discuss your plans with a mortgage consultant to ensure that a HELOC is the best option for your particular home mortgage financing needs.

For more information regarding Home Equity Lines of Credit, be sure to read our recent blog explaining Home Equity Revolving Lines of Credit or a HELOC in more detail.

2 Responses so far.

  1. Tim says:

    Hi. I have a rental property with positive cash flow. I have a 200k heloc. Paying prime +1. (3.5%). I can’t decide if I should leave it revolving or fix it 2years at 2.49%. My actual primary res is free and clear and no other debts. Could I get some advice? Thanks in advance!

    • Hi Tim:

      If your HELOC is currently prime + 1%, then you are actually paying 4% currently on the $200,000.

      If you lock-in at 2.49%, you’ll save a significant amount in interest, but you’ll lose the revolving feature of the HELOC.

      Rather than the 2-year fixed, I might even suggest going with a 5-year variable which is also tied to prime like your HELOC and is at 2.85% (2.65% if insured with HMHC or Genworth)

      Please also keep in mind that some lenders add a premium to the interest rate for rental properties so that will have to be something we consider as well.

      Did you want to chat on the phone when you have a second?

      Hussein Saad
      Mortgage Agent

      The Mortgage Centre | Licence Number: M12000636 | Windsor, ON Canada
      Phone: 519-903-0598 | Fax: 519-966-6702 | Web: http://www.homemortgageontario.ca

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