What Are the Advantages to Having a Home Equity Line of Credit?
- The main advantage to your home equity line of credit is ongoing access you have to your equity at a low cost of borrowing.
- Rates are typically set at prime to prime + 0.50%
- Because your home equity is secured against your largest asset - your home, you will be able to borrow significantly more than a standard line of credit would allow.
- You can access your home equity line of credit for the purpose of additional investments such as purchasing a rental property.
- The monthly interest that you are charge when advancing funds from your HELOC for the purpose of any investment is tax deductible.
- Unlike a typical mortgage, a home equity line of credit allows you to make interest only payments, otherwise giving you the option of a lower-than-normal monthly payment. You can begin making principal and interest payments at any time.
- Your HELOC also gives you the maximum flexibility to use and pay off as you see fit. There are no restrictions to how fast or slow you can pay off your loan if you are making the minimum monthly interest payments.
- Many HELOC products when combined with your mortgage are re-advanceable. Thus, meaning as you pay down your mortgage, the limit of your HELOC will continue to grow. Your home equity line of credit is a revolving source of funds that you can access at any time.