How Does a HELOC Work?
Here’s what HELOCs are, how they work, and why you should use one.
Today I’m talking about HELOC (or a home equity line of credit) and how it can be used to buy a home.
With a typical mortgage, you borrow a lump sum of money and make monthly payments that include interest. A HELOC, on the other hand, is a revolving source of funds that works like a credit card.
You can access it as you chose, there are many different ways to access the funds, and unlike home equity loans, there are very few closing costs. Some banks can do a HELOC for as little as a few hundred dollars for an application fee.
If you have a lot of equity in your home and have a big expense coming up or want to put your equity into a different investment, you can do that. A HELOC gives you the fantastic opportunity to use your home’s equity to build even more wealth. You will only pay interest on the money you actually use.
If you have any questions about HELOCs or anything else related to real estate, don’t hesitate to reach out via phone or email. I look forward to hearing from you soon.