A HELOC can be a great way to finance home improvements
There are different types of home loans and HELOC (home equity line of credit) is one type. It is line of credit over and above your primary mortgage. If you need a HELOC in Calgary, Alberta, then My Mortgage Broker (Verico) can help.
A HELOC can be an inexpensive form of finance provided you have enough equity in your home and you have a stable income. If you don’t have a stable income, then an equity line of credit is not a good idea.
A HELOC is a line of credit that allows you to draw funds as and when you need them. You only pay interest once you use the funds. You can also structure a HELOC so that capital payments are deferred. This means you initially only need to pay the interest portion and principal repayments are deferred for a certain amount of time.
A HELOC can be a sensible way to finance home improvement o renovations. For example, you can periodically draw funds when you need to pay contractors. You only pay interest on the funds you actually use – in this way the loan is like an overdraft. Your interest payment might also be tax deductible.
With a HELOC you have the flexibility of drawing funds as when you need to. You can draw funds up to the approved limit. You must keep in mind that interest rates are variable. That means if the rates go up, you will end up paying more and vice versa.
A HELOC credit line will be available for an agreed term after which you will need to repay the capital portion. The finance experts at My Mortgage Broker (Verico) will explain the pros and cons of various home loans such as first mortgage, home equity loan, HELOC, cash out refinance and reverse mortgage.