Line of Credit loans are loans can also be known as a revolving line of credit. The loan repayments for this type of facility are based on the money you actually utilise and you are only required to make interest only repayments. These products allow you to utilise any equity funds available in your property as a ready source of funds accessible at any given time up to an agreed limit. You can use these funds for any personal purpose just like a credit card with any additional principal repayments made, then become available to redraw. To obtain access to funds is usually by writing a cheque or using a specific debit card. There are no set requirements so long as you meet all the requirements such as fees and charges applicable on a monthly basis, you can repay as much or as little as you like in a sense.
A homeowner can utilise the funds for really anything such as holidays, pay bills, buy a car or even to carry out renovations on a property. This type of home loan however is especially attractive to investors who need readily access to funds at any given time. Line of Credit Loans have advantages for high income earners who wish to reduce the debt on their home at a rapid rate. In many cases these types of loans come with a slightly higher rate compared the traditional style home loan that everyone knows, however your mortgage broker Gerry will be able to provide you with the most suitable option.
Some lenders charge monthly or annual fees on a line of credit loan. These fees can be charged monthly, half yearly or on an annual basis. While the final fees applicable will differ from lender to lender, some banks will charge other fees such as an application fee, valuation fee and discharge fees.
If you have a question regarding anything spoken about in this article or anything related to Line of Credit home loans click here to talk to your finance broker Gerry and he will be able to assist with answering any questions you may have.