HELOC, home equity line of credit
Prime | no closing costs

HELOC calculator- should I get a home equity loan to lower my debt?

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Using a credit line to borrow against the equity in your home is a popular source of consumer credit.  We offer these home equity credit lines in a variety of ways.  Have an existing line?  Pay it off with a no closing cost HELOC at Prime +.  Your Choice Finance® Loan Officer will be happy to help walk you through your options and to help with your application. (HELOC rates)

Is a home equity credit line for you?

If you need to borrow money, home equity lines can be a very useful source of credit.  They are a great tool to provide you with large amounts of cash at relatively low interest rates... and are great loans to fund your construction and rehabilitation projects.  They may also provide you with certain tax advantages unavailable with other kinds of loans. (Check with your tax advisor for details.) 

How much money can you borrow on a home equity credit line?

Choice Finance® has programs that will allow you to go to 90% of your home's value.  Ask about the length of the home equity loan, whether there is a minimum withdrawal requirement when you open your account, and what are the minimum and maximum line requirements after your account is opened.  Talk with us about any debts you would like to pay off (credit cards, auto loans, outstanding collections,..) and we will arrange it so they are paid off at settlement if you prefer.  Debts like collections will be required to be paid off at settlement.  Inquire as to how you will gain access to your credit line:  with checks, a credit card?

Ask about your draw period... what is the term you can make withdrawals from your account.  Typically, our programs allow for a draw period of 10 years (120 months), during which you have the option to pay interest only on the outstanding balance.  Once the draw period expires, the remaining balance typically is amortized for 15 years.  You may be able to renew your credit line at that time.

What is the interest rate on the home equity loan?

Lines of credit are based on the Prime Rate.  This will depend on how strong you qualify AND how high you'd like to take your home's loan-to-value ratio to (80%.. 90%.. 100%?).  This will determine if your rate is Prime minus, Prime, or even Prime plus the margin.  It will also determine what your margin is.  Fixed rate second mortgages are usually slightly higher than the variable rate HELOC.  Obviously, these fixed rates will offer stable monthly payments over the life of the credit line.  These fixed rates are offered at 15 and 30 year terms.  Many of the 30 year term programs balloon in 15 years, so make sure you are clear on what you are getting. 

What are the upfront closing costs?

When you take out a home equity line of credit, many of the same charges are incurred as when you financed your original mortgage.  These include your credit report, appraisal, title work and insurance, recordation taxes for your County and/or State, attorneys' fees, and possibly points (a percentage of the amount you borrow). 
HOWEVER, most of the lines we offer are no-cost loans
.  We pay all of these costs for you.

What safeguards are built into the loan?

Review carefully the Federal Truth in Lending Act.  This requires us to inform you about the terms and costs of the plan at the time you take application.   Choice Finance® will disclose the APR and payment terms and inform you of charges to open or use your account.  Again, most of our lines are offered at no cost to you.  We pay everything considered a closing cost.  When you go with the no-cost option, in most cases there will be some type of termination fee and repayment of the recordation taxes and other costs we paid on your behalf, if you close out this line in the first 3 years.  This is not the case if you pay your balance off, only if you cancel and close out the line.

Review your home equity terms carefully before you sign, and contact your Choice Finance® Loan Officer for a clear explanation of the rate, terms, and costs on the credit line programs you qualify for and to help you with your application.




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