Here at MortgageBase, we specialize in providing premium jumbo and super jumbo mortgage packages at competitive rates. Alongside our traditional home loans, we also provide home equity line of credit loans (or HELOC loans). For today’s article we’re going to talk about what a HELOC loan is, what it can be used for, and the pros and cons of a HELOC product.
What Is a HELOC Loan?
A home equity line of credit is just that, a line of credit. This line of credit can be utilized to make purchases in the same fashion that you might otherwise use any other line of credit; you can think of a jumbo or super jumbo line of credit as a large credit card account. Since a HELOC works just like another line of credit, you aren’t required to take out the whole amount of the credit line. Instead, you can pull out funds up to the maximum borrowed amount. Your and your lender can decide on the maximum amount that you’d like to have available. Once you’ve set up a HELOC account, you can utilize the loaned funds available to make purchases. A special credit card and checkbook may be issued to you so that you can easily tap into your HELOC funds.
How Can a HELOC Be Used?
Are you looking to improve your home? Or do you need a new vehicle to get to work? You can pull out funds from your jumbo or super jumbo HELOC mortgage loan. Pull out as much funding as you’d like (up to the maximum loaned dollar amount) for whatever you’d like. Folks often utilize a jumbo or super jumbo HELOC mortgage loan to make major home improvements or renovations on their home. It’s also popular for individuals to utilize a HELOC in conjunction with their personal business. HELOC loans can be utilized if a major investment is necessary, or if an unexpected cost comes up.
What Are the Advantages and Disadvantages of a HELOC?
Our jumbo and super jumbo HELOC loans are a form of adjustable rate mortgages (ARMs). Since HELOC rates are adjustable, the interest rate applied to the outstanding balance can vary. In this way, HELOC mortgage loans are considered rather unstable. However, HELOC loans offer numerous benefits. A HELOC mortgage loan, especially a jumbo or super jumbo HELOC, can be much larger than a traditional line of credit. Instead of relying on tens of thousands of dollars of flexibility that you may have with a normal line of credit, you may be able to attain a HELOC that provides hundreds of thousands of dollars of flexibility.
In addition, you don’t have to take out the full amount of your HELOC. With a traditional jumbo or super jumbo mortgage, the home loan amount is a fixed amount of funds that you receive. With a HELOC, the funds may be drawn upon as desired. In this way HELOC mortgage loans are far more flexible.
If you’re further curious about our HELOC products, or any of our jumbo and super jumbo home loans, please feel free to get in touch with a representative here at MortgageBase. You can also learn more about our interest only jumbo and super jumbo HELOC mortgages here.