A Home Equity Line of Credit can be a comfortable alternative to a traditional mortgage. It allows you to simplify your borrowing as you may never have to apply for another loan. You’ll have access to your available credit limit 24 hours a day, seven days a week. With the HELOC you can have access to up to 65% of the appraised value or purchase price of your home (whichever is lower), less any prior outstanding charges. You pay as much as you want, or pay as little as interest only.
That being said, you can use a combination of traditional mortgage and HELOC that could be refinanced up to 80% loan-to-value (LTV). This loan option can be sliced up any way you want however; the line of credit portion cannot exceed 65% of the value of your home leaving you 15% (balance of 80%) as a traditional mortgage. Most borrowers will take the bulk of the loan as a mortgage but you can do anything in between depending on your needs. Our licensed mortgage professionals can explain your options to you and help you make an informed decision based on your circumstances.
If at some point you decide to protect yourself from interest rate increases and establish regular fixed installment payments to help you plan your budget, you can choose to convert all or a portion of your Home Equity Line of Credit balance to a Fixed rate and lock in a competitive one-to-five year fixed interest rate at any time.