3 HELOC Shopping Mistakes to Avoid
Getting a home equity line of credit (HELOC) is a big financial decision — one to approach with care. To help you, here are three mistakes to watch for and avoid.
3 HELOC Mistakes to Avoid
1. Don’t just shop interest rates and fees. Of course, get the lowest-cost home equity line of credit you can. But there are other important factors to consider:
• How long will you be able to borrow against your credit line?
• What will your repayment plan look like, based on the amount you plan to use?
• What’s the reputation and experience level of your lender with home equity lines of credit?
2. Don’t assume a home equity line of credit is the best way to tap equity. There are several ways to tap home equity, and some may be better suited to your needs. Other popular alternatives are:
• Cash-out refinance loans
• Fixed rate second mortgages (home equity loans)
3. Don’t overdo it. A home equity line of credit can be one of the wisest ways to borrow. But, like all good things, it’s possible to overdo it. For example, don’t:
• Use a home equity line of credit to bail yourself out of debt caused by over-spending…and then continue to over-spend.
• Deplete your home equity over and over, leaving yourself without assets to handle true emergencies or lowering your standard of living at retirement
HELOC Shopping?
Countrywide Home Loans, a division of Countrywide Bank, FSB, offers a variety of home equity loan options. The mortgage experts at Countrywide can answer your questions about home equity loans and guide you through the HELOC options. Call today, at 1-866-436-0620 for a FREE, no obligation consultation.
