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  • Digg it UP - Establishing a Home Equity Line of Credit to Finance Home Improvements and Construction

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    orrow money and make interest only payments. At the end of this "draw period," you may be allowed to renew the credit line, but some plans don't allow renewals
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    A home equity loan allows you to get a loan by using the equity in your home as your collateral. A home equity loan (second mortgage) can be obtained in a lump sum or used as a revolving home equity line of credit (HELOC).

    Home equity lines of credit are popular financing tools used as home improvement and construction loans. Borrowers love the fact that you only pay interest on the equity you use, and you can draw from your credit line more than once without having to apply for a new loan each time, so you can pay each contractor as needed.

    Many HELOC plans set a fixed period (usually 10 years) during which you can borrow money and make interest only payments. At the end of this "draw period," you may be allowed to renew the credit line, but some plans don't allow renewals.

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    sum or used as a revolving home equity line of credit (HELOC).

    Home equity lines of credit are popular financing tools used as home improvement and construction loans. Borrowers love the fact that you only pay interest on the equity you use, and you can draw from your credit line more than once without having to apply for a new loan each time, so you can pay each contractor as needed.

    Many HELOC plans set a fixed period (usually 10 years) during which you can borrow money and make interest only payments. At the end of this "draw period," you may be allowed to renew the credit line, but some plans don't allow renewals

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    ruction loans. Borrowers love the fact that you only pay interest on the equity you use, and you can draw from your credit line more than once without having to apply for a new loan each time, so you can pay each contractor as needed.

    Many HELOC plans set a fixed period (usually 10 years) during which you can borrow money and make interest only payments. At the end of this "draw period," you may be allowed to renew the credit line, but some plans don't allow renewals

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    to apply for a new loan each time, so you can pay each contractor as needed.

    Many HELOC plans set a fixed period (usually 10 years) during which you can borrow money and make interest only payments. At the end of this "draw period," you may be allowed to renew the credit line, but some plans don't allow renewals

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    orrow money and make interest only payments. At the end of this "draw period," you may be allowed to renew the credit line, but some plans don't allow renewals. Some plans make you pay the entire balance of the loan at the end of the draw period. Others may allow fully-indexed (principal and interest) repayment over a fixed period (the "repayment period").

    Unlike a fixed mortgage rate loan with a fixed payment for the life of the mortgage, HELOCs are adjustable rate mortgages (ARMs) with variable interest rates based on a publicly available index (such as the prime rate published in some major newspapers like the Wall Street Journal or a U.S. Treasury bill rate).

    The Federal Reserve suggests that if f you decide to apply for a HELOC, to look for the plan that best meets your

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