Home Equity Line of Credit
Gain flexibility and freedom with a Home Equity Line of Credit (HELOC) and enjoy easy access to funds for anything you need, whenever you need it! Speak with a Union Square Mortgage professional for more details.
Home Equity Line of Credit (HELOC) loans are available to homeowners who have equity in their homes. HELOCs allow individuals to establish a line of credit—much like a typical credit card—by utilizing available equity in their homes. Funds are then accessed by making draws as needed to pay for home improvements, college tuition, pay-off high-interest credit cards or other revolving debt, or for any other personal use. Like a credit card, a HELOC loan requires a monthly payment. If the HELOC is in the first phase of the loan—the draw period—monthly payments are interest-only. If the HELOC is in the second phase of the loan—the repayment period—monthly payments entail principal and interest.
Equity Requirement: 80% LTV or less.
Loan Terms: A HELCO is comprised of two phases—the draw period and the repayment period. Both periods have their own term. The draw period typically lasts between five and 10 years. The repayment period typically lasts between 15 and 20 years.
Credit Requirements: Higher credit scores are generally required to qualify for a HELCO. Typically, 660-680 is required by lenders. Although, in some situations, even higher scores may be required, and, in rare situations, scores lower than 660 may qualify.
The Draw Period: During this period, the borrower may advance funds for use as desired and is required to make monthly, interest-only payments. No principal payment is due. Individuals may pay towards the principal balance if desired, but no principal payment is required during the draw period. Once the draw period ends, an individual may no longer borrow against the loan.
The Repayment Period: At the conclusion of the draw period, the loan transitions to its repayment period. During this period, the borrower begins to pay towards the principal of the loan, so monthly payments include principal and interest.
Right to Rescind: HELOCs require a 12-day cooling-off period and a three-day right of rescission at the time of origination.
Speak with a Union Square Mortgage professional to learn if a Home Equity Line of Credit is the right mortgage product for you!