Home Equity Lines of Credit (HELOC)
What is a HELOC?
A home equity line of credit (HELOC) offers a flexible way to borrow funds. HELOCs differ from traditional home equity loans in that you can draw money from a HELOC as needed instead of taking out a single lump sum loan.
How Does A HELOC Work?
A HELOC is a revolving line of credit similar to a credit card. You can borrow funds up to a set credit limit, and interest is charged on the amount borrowed. The revolving credit line can be paid down and reused during your draw term, which typically lasts 5 to 10 years. You’ll only pay interest throughout the draw term. After the draw term is complete, you may either pay the balance in full or pay according to a set schedule (interest must still be paid). You may also refinance the equity line for an additional 5 to 10 years. A home appraisal may be required to obtain a HELOC.
What Are The Benefits?
With a HELOC from Prospera Home Loans you can:
- Set up emergency access to credit
- Buy a new car, truck, boat or RV
- Pay for college tuition
- Renovate your home
- Consolidate your bills
Variable From Top To Bottom
Convenient From Open To Close
Accessible At All Times
Flexible For The Future
Friendly For Your Taxes
Generally speaking, your credit history and score don’t have a major effect on obtaining a HELOC because your home secures the loan. Equity in your home will be a key component in determining your available credit. When considering a HELOC, remember that the loans are secured by your home. Failure to pay could damage your credit standing and result in the loss of your home through foreclosure.