Calgary Home Equity Line of Credit – A Means to an End

Wondering how to finance those home improvement plans or handle the exorbitant cost of a wedding? A home equity line of credit, or HELOC, is one option that allows you to access some of the equity you have built in your home.

This type of mortgage refinance functions somewhat like a credit card in that you can borrow funds up to your credit limit in whatever increments you choose. While you have to pay back the entire sum plus interest at the end of the term, minimum monthly payments are typically interest only.

HELOC Mortgage Refinance vs. Home Equity Loan

A home equity line of credit and a home equity loan are not the same product. Here are some of the main differences:

• With a home equity loan, a lender lends a lump sum to a home owner and charges interest on the full amount. With a mortgage refinance (home equity line of credit), the home owner borrows up to a certain amount and is assessed interest charges only on the amount that is used.
• A home equity line of credit carries a variable interest rate, usually based on the prime lending rate plus a margin. Compare this to a conventional home equity loan, which typically has a fixed interest rate.
• In some cases, such as using a home equity line of credit for investment purposes, the interest paid may qualify as a tax deduction.

Home Equity Loan or Home Equity Line of Credit? We can Help You Choose

Depending on your needs, a home equity line of credit may provide funds and advantages that will allow you to achieve your goals. At MBN Mortgage in Calgary, AB we can further explain the process, as well as annual percentage rates (APR), terms and conditions—everything you need to know to make an informed decision. You have worked hard to build equity in your home. It may be time to reap the rewards!