Line of Credit Loans

If you’d like access to extra money to fund renovations, buy cars, go on a holiday or something else, a line of credit or home equity loan could be the answer.

Also known as a revolving line of credit, this home loan offers you an instant and often substantial credit facility that’s secured by a first mortgage on a residential property. It’s like a credit card in that you can withdraw money up to a set limit whenever you like. You can then repay that money in full or pay monthly repayments.

Benefits of a Line of Credit Loan

•  You have easy, instant access to funds that you can use for any purpose you choose.
• Many line of credit facilities often come with an ATM card, credit card, cheque book, internet and phone banking so you can access the funds easily from a variety of locations.
• Interest rates are usually lower than what you would pay with your credit card.
• When coupled with an offset account and some discipline you can use this home equity loan facility to help extinguish your mortgage quickly and save a small fortune in interest.
• Consolidate your debts – bundle personal loans and credit card debt into the mortgage. This alone will often save you a small fortune in interest and lowers your monthly repayments by several hundred dollars.

Potential Pitfalls of a Line of Credit Loan

•  Discipline and good budgeting is crucial so if you’re the type of person who finds it difficult to be disciplined, this may not be the right loan for you.
• These types of loans give borrowers a lot of freedom. More specifically, having money there sitting in a Line of Credit account easily accessible means it’s easy for temptation to get the better of people. Many borrowers end up using up their Line of Credit in a relatively short space of time which significantly erodes equity in their home.
• You often pay a slightly higher interest rate than what you would with a traditional home loan.

To find out more about how a “line of credit” or “home equity” loan compares with other home mortgage options, simply talk with a Wealth Concerns mortgage broker who can help you identify which is the right line of credit facility for your individual needs both now and into the future.

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If you would like to discuss your specific circumstances call us on 1300 700 496 or alternatively text your name and number to 0411 320 962 and we will call you.