Question:

What are home equity line of credit loan advantages?

Answer:

Most often home equity line of credit loan advantages make it a desirable home loan refinancing alternative.

How to Maximize Home Equity Line of Credit Loan Advantages

Firstly, your HELOC interest is tax-deductible and a HELOC application fee should be refundable at closing, if the lender ever requests one. Also, you should be able to avoid closing fees, as well. Or they should be very low compared to a standard loan application - not more than $1000, and usually are covered by the lender without adjusting the rate.

Avoid HELOC lenders with usage fees - if you decide to open a home equity line of credit and have it as a last resource, it is your right to do so. However, some lenders will not like it and try to charge you a usage fee. Also, with a HELOC you should be allowed to pay principal as often and as much as you like. This is what makes them so attractive in the first place. So, find another lender if they are trying to charge you prepayment penalties.

Seek a home equity line of credit that adjusts quarterly rather than monthly, has an APR close to the prime rate, and a bearable lifetime cap. In case you get a bad lifetime cap, you should have the chance to convert the HELOC into a fixed-rate home equity loan.

This basically sums up the advantages you can get of having a home equity line of credit available to you. Bear in mind - loan features will vary among lenders and specific HELOC products, so make sure you always shop around first.

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