Home Equity Line of Credit (HELOC)
Consumers who are faced with unexpected expenses are often
confused about just how much they need to borrow. That is
where a home equity line of credit comes into the picture.
Option One Mortgage wants homeowners to know that they are
not limited to a traditional approach when it comes to a second
mortgage. Instead of borrowing a lump sum to be disbursed
upon closing, a home equity line of credit lets consumers
draw on a pre-determined amount of cash that has already been
approved by the lending institution.
Let’s say a homeowner is doing renovations on their
roof. The project will probably cost around $5,000, barring
any unforeseen expenses. The homeowner does not want to borrow
more than they need, nor do they want to be caught without
a cushion should be project go over budget. The flexibility
of a home equity line of credit can be the perfect solution.
Option One Mortgage reminds consumers to carefully review
the terms and conditions of any home equity line of credit
second mortgage loan they are considering. Depending on the
situation, there can be a minimum withdrawal amount, and you
also need to understand what the expectations are as far as
While home equity lines of credit do not always require you
to pay down the principal every month, you need to have a
plan in place as to how you will pay the funds back when the
loan comes due.
Planning on making a balloon payment at the end of the loan
term is not realistic unless you know for sure from where
the funds will come. Some simple words of advice, never borrow
money unless you are certain that you will be able to pay