Stewart Brown Jr – Mortgage Loan Originator – Purchase or Refinance
| A Home Equity Line of Credit or HELOC as it is known is typically a second mortgage. This product allows homeowners the ability to borrow against the equity they have in their homes and to receive that money as a line of credit similar to a credit card. Borrowers can then use these funds for a multitude of purposes, including home improvements, education or to consolidate higher interest rate credit cards or auto loans. To qualify you will typically need a 700 credit score or higher, reliable income, low DTI, at least 15-20% available equity and a responsible payment history. HELOCs exploded in popularity in the 1980s as a way to circumvent the Tax Reform Act of 1986 which excluded consumer interest from being tax deductible. With the HELOC, consumers could deduct all the interest. However, the Tax Cuts and Jobs Act of 2017 removed the home equity loan tax deduction starting in 2018 except for qualified home renovations. |
| A Home Equity Line of Credit or HELOC as it is known is typically a second mortgage. This product allows homeowners the ability to borrow against the equity they have in their homes and to receive that money as a line of credit similar to a credit card. Borrowers can then use these funds for a multitude of purposes, including home improvements, education or to consolidate higher interest rate credit cards or auto loans. To qualify you will typically need a 700 credit score or higher, reliable income, low DTI, at least 15-20% available equity and a responsible payment history. HELOCs exploded in popularity in the 1980s as a way to circumvent the Tax Reform Act of 1986 which excluded consumer interest from being tax deductible. With the HELOC, consumers could deduct all the interest. However, the Tax Cuts and Jobs Act of 2017 removed the home equity loan tax deduction starting in 2018 except for qualified home renovations. |
| Pros or advantages of a HELOC include: (1) the interest might be tax deductible, (2) you can borrow only what you need (3) there are flexible payment options and (4) it can help improve your credit score and (5) there are few restrictions on how the funds can be used. People cite the main cons of a HELOC as: (1) using the home as collateral (2) variable interest rate and (3) overspending since the line acts like a credit card. |
| Pros or advantages of a HELOC include: (1) the interest might be tax deductible, (2) you can borrow only what you need (3) there are flexible payment options and (4) it can help improve your credit score and (5) there are few restrictions on how the funds can be used. People cite the main cons of a HELOC as: (1) using the home as collateral (2) variable interest rate and (3) overspending since the line acts like a credit card. |
Reach out to me for further detailed information on Home Equity Loans and Lines of Credit programs.