A home equity line of credit (HELOC) is basically a variable rate line of credit which uses your home or primary residence as security for the debt you take or collateral. Typically, the amount of money you are able to borrow is the difference between any debts you may have secured using your home such as your current mortgage balance and the market value of your home. It therefore acts as a credit card in that it is a revolving line of credit for the homeowner, this does imply that you pay interest on the amount you spend only. Simply put, a HELOC is a second mortgage against your property. Once your HELOC account is opened, you are at liberty to withdraw as much cash as you require up to the credit limit which has been approved. You will thus be expected to pay interest only on the amount you have withdrawn and not on the whole amount allocated to you.
It is important to mention that the use of the money you get from a HELOC loan is not tied to your home. Apart from making home improvements that will add value to the house, you can also use the money to pay for college, consolidate debt or use the cash for any large purchase you may be planning to make. Generally, lenders extend a credit line of up to eighty percent (80%) of your homes available equity.
With the above in mind, it is always important to ensure that you get the best deal out of the available HELOC lenders in the market. Here are some tips that will ensure that you find a lender that offers you the best deal. Just like when you are shopping for a mortgage or normal bank credit, you should always shop carefully. The first step usually involves calling available lenders and checking through online sites to ensure that you get the correct information. Whenever possible, you should make a list of what each bank is offering side by side. Make sure you compare the repayment and draw periods as well as the initial fees which may include closing, appraisal and application costs. You should also list all the possible repayment terms including details such as when the period ends, if refinancing or renewal will be made available and if there is a balloon payment.
You should not be afraid to haggle on a few issues. A case in point is if one lender does offer you a good rate with closing fees while another one offers you no closing fees; don’t fear asking your lender of choice for a better deal. Even though they may decline your request, if you don’t ask you don’t even give yourself a chance to get a better deal.
Always be on the lookout for teaser rates. Some lenders tend to advertise HELOCs with fixed rates or very low rates simply to draw you in and become their client. However, after a while they those rates revert to their higher numbers. You should always ensure that the rates advertised will run the entire period of the loan.
Because every lender has its own policies, you should take your time and ensure you fully understand how each bank operates and get important draw information. In the event that you urgently need money , it is may be advisable to withdraw funds during the closing since it may take a while before your get your credit card or checks that are linked to your account.
Here are some reliable heloc lenders \ home equity lenders in the market. They include but are not limited to the following:
1) JP Morgan Chase and Co
Mailing Address: 270 Park Ave New York, NY 10017-2014
Phone Numbers: 1-866-776-5167
Web URL: http://is.gd/si0p9f
Other Programs: being such a big financial institution chase does offer a large number of products such as Auto loans, Home Equity, Student Loans, Mortgage etc.
2) Wells Fargo Home Mortgage
Mailing Address: 420 Montgomery Street, San Francisco, CA 94104
Phone Numbers: 1-888-667-1722
Web URL: http://is.gd/qTbQEZ
Other Programs: this is another big American financial institution that offers a wide range of products such as mortgage loans, home equity lines, student loans, personal lines and loans, auto loans as well as insurance covers such as Homeowners insurance, umbrella liability insurance, life insurance and auto insurance.
3) Bank of America
Mailing Address: 100 North Tryon Street Charlotte, NC, 28255
Phone Numbers: 1-800-763-2053
Web URL: http://is.gd/byrK51
Other Programs: apart from home equity loans, the bank does also offer equity loans, mortgage, refinancing options, as well as student loans.
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