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Home Equity Line of Credit Rates

Second Mortgage Outlet provides rates for home equity lines of credit. Get approved now and establish a good home equity line of credit for refinancing credit cards, financing home improvements and gaining access to cash anytime. We suggest that you look at all your home equity finance options before taking on a new home equity loan using your property as collateral.

Prime Rate Credit Lines
Interest Only HELOC
Adjustable Rate Credit Lines
Large Home Equity Lines of credit up to $500,000
Low Rate Second Mortgages

How do Home Equity Credit Lines with Interest Only Work?

Home equity lines of credit (HELOCs), also known as home equity credit lines, are one of two types of home equity (2nd mortgage) loans. They are a form of revolving credit in which your home serves as collateral. Many lenders set the credit limit on a home equity line by taking a percentage (e.g., 75 percent) of the home's appraised value and subtracting from that the balance owed on the existing mortgage.

HELOCs work like credit cards--borrowers can borrow repeatedly from their credit lines, up to the credit limit (the amount of money borrowed), and make interest only for 10 year draw period. Some plans may also require that you take an initial advance when the line is set up, and there may be limitations on how you use the money. Some plans may require you to borrow a minimum amount each time you draw on the line (for example, $300) and to keep a minimum amount outstanding. After the draw period, the full balance is amortized and paid off over remaining years.

HELOCs are variable rate interest loans. Variable interest first and second mortgage loans are also known as adjustable rate mortgages (ARMs). HELOC interest rates consist of a rate tied to a publicly available index, such as the prime rate index published in the Wall Street Journal, which periodically adjusts (when the Federal Reserve raises and lowers interest rates) and a margin that is determined by the lender at the time of the loan application. The margin is fixed and never changes through the term of the loan.

HELOC monthly interest rates and annual percentage rates (APRs) are calculated based on your FICO credit scores. The higher your scores, the lower the rates you'll pay. APR is the actual yearly cost of funds over the term of a loan, including any up-front fees or penalties that are applied to a loan. Upfront costs may include mortgage insurance premium, points, lost interest earnings on escrow accounts and prepayment penalties. These amounts are totaled and added to the interest figure.

HELOCs are attractive because of their low intro rate, and you only pay interest on what you access. They are great if you are unsure how much you need, as well as being great for home improvements and home construction. "It's so flexible," says Kellon Tippett, vice president at BB&T Corp.'s direct retail lending division. "You can pay those costs as they come up without having to go back and reapply, so it's relatively cheap for the borrower." Take advantage of today's lowered interest and get started on much-needed home improvements or construction by applying for your HELOC today.

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