Welcome to this video on Home Equity Lines of Credit and how to actually get one.
This video is actually a continuation of a different video we did on what home equity lines of credit, or HELOCs for short actually are so if you haven't seen that video.
Head over to our website at www.opendoorsfp.com and check it out.
Well to begin, you have to apply for one, and this will usually be done with a bank or some lender.
As long as your credit score's pretty good, I don't imagine you'll struggle finding someone who wants to do this because whoever owns the HELOC is making money.
Then, once your application is approved and there'll probably be some fees
associated or during that process you will enter what is known as a draw period. This usually falls to be about 10 years long. During this 10-year period of time,
You can take out money and you only pay interest on what you actually borrow. Keep in mind you don't have to take money out you only borrow what you need and you only owe interest on what you actually borrow.
None of what you've actually borrowed has to be repaid at this point although you can certainly make payments ahead of time.
Eventually the bank or the lender is going to want to get their money back so after you go through that draw period, you enter the repayment period.
This is usually about 20 years.
At this point it basically becomes a normal mortgage where you have principal and interest payments and what that means basically is some of your payment is going to go towards the amount you borrowed and paying that back while the other part is paying off any interest that has been charged. If you are interested in seeking a home equity line of credit and you aren't sure if it's good for your financial circumstances, be sure to reach out to a financial planner. Otherwise we hope this video has helped provide some knowledge to help you make your decision.
Thanks for watching everybody that's all I have for you today.
Please check out our website for other educational videos otherwise if you have any questions please reach out and we are happy to guide you.