South Florida HELOC
Frequently Asked Questions for Home Equity Line of Credit
A Home Equity Line of Credit (HELOC) is a revolving line of credit secured by your home and is the most flexible type of home financing available. HELOCs are a convenient way to finance almost anything, including home improvements/repairs, education, purchasing a vehicle, or consolidating higher interest rate balances. Monthly payments are applied to both principal and interest. The portion applied to the outstanding principal balance becomes available for further use again.
Interest rates for home equity lines and loans are typically lower than for other forms of credit because your home is used as collateral – meaning the risk to a lender is less than with an unsecured loan. A lower rate means a lower cost to you.
HELOCs are a convenient ways to finance almost anything, including home improvements/repairs, education, purchasing a vehicle, or consolidating higher interest rate balances.
Our HELOC has a variable rate which changes every June and December tied to the current prime rate (as published in the money rates section of the Wall Street Journal). In addition, the home equity line of credit includes the option to make draws on a portion, or all of your available balance in one of several fixed rate options. As you reduce the principal owed, those fund become available to be used
again.
BrightStar covers your closing costs on lines under $250,000. On line over $250,000, you pay for the property appraisal. We will collect from you the State of Florida taxes (Documentary stamp) of 35 cents per $100 on all lines.
A HELOC has two different periods, a draw period and repayment period. The draw period is 10 years, where you have ongoing access to available funds and can use the funds how you’d like. You make monthly payments consisting of principal and interest. During the repayment period, you can no longer advance on the home equity line of credit, and must continue make principal and interest payments. The new minimum payment will ensure the balance is paid in a maximum of 15 additional years or by the maturity date. The interest rate on the balance continues to be variable.
With a Home Equity Loan, funds are received as a lump sum versus a Home Equity Line of Credit that lets you borrow money as needed. Payments and interest rates on a Home Equity Loan do not change throughout the life of the loan. Available terms on Home Equity Loans are 10, 15, or 20 years.
There are longer terms available on a Home Equity Loan. You can pick a 5, 10, 15, or 20-year term with payments that may better fit your budget. Home Equity loans are a convenient way to finance almost anything, including home improvements/repairs, education, purchasing a vehicle, or consolidating higher interest rate balances.
Yes. On a Home Equity Loan the borrower pays all closing costs.
Contact a Mortgage Specialist listed on www.bscu.org/mortgage
