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ELOC

Is Your Equity Line of Credit Coming Due?

 

Do you have a Home Equity Line of Credit (HELOC) coming due? If your HELOC is getting close to its 10th year, and you still have a balance owed, you most likely will be seeing a large spike in the monthly payment once your enter the repayment term of your HELOC. OR

With the Fed increasing the Fed Funds Rates, which affects your cost of your current Equity Line of Credit, is your interest so high now that it is making your monthly budget difficult?

Being proactive and preparing for the changes in your Equity Line of Credit that will or are occurring is highly recommended. Homeowners need to know that they have options:

  • Payoff Your Equity Line of Credit. You can use assets from your bank account or investment account to pay off the line of credit or pay it down to make the term portion of the loan more affordable.

  • Sell Your Home and Buy A New Home. You can sell your current home and pay off both the first and 2nd Equity Line of Credit and then purchase a new home that is affordable to your budget.

  • Refinance the HELOC and Your Current First Mortgage Into a New Mortgage.  By refinancing the HELOC into a new primary mortgage, you could take advantage of a fixed interest rate that is still low by historical standards. Consider refinancing into a 15- or 20-year mortgage to reduce total interest payments or keep a 30-year term and make principal reduction payments to save years of payments and tons of interest.

There are pros and cons to each strategy and you need to explore the best options for you and your personal financial situation. Home values have appreciated in value.  This is a great time to explore your options.

We do have a solutions:  Learn more by contacting Karen Jones.

 

 

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