Home Equity loans and home equity lines of credit (HELOCs) are often associated with closing costs, but it is possible to get both without them. The amount of the closing costs can range from 2% to 5% of the loan amount, depending on the lender. It is important to ask your lender about any fees associated with your HELOC, as there may be initial charges such as an application fee, an annual fee, and an early cancellation or closing fee. Bank of America HELOCs have no application fees, annual fees, or closing costs.
However, if you close your HELOC account within 36 months of opening it, you may be subject to an early closing fee. Marc Wojno is a senior editor at CNET Money and oversees topics such as banking and housing equity. He has been a writer and editor in the financial field for more than two decades, including for media organizations such as The Kiplinger Washington Editors, US News & World Report, Bankrate and Dow Jones. Before joining CNET Money, Wojno was a senior finance editor at ZDNet and wrote about blockchain, cryptocurrency, finserv, investments and taxes.
Outside the digital world, Marc can be found spinning vinyls, passing tapes from reel to reel, shooting movies with his Bolex and organizing an occasional contest in a bar. The flexibility offered by lines of credit has both advantages and disadvantages. You can borrow with your line of credit at any time, but unused funds don't charge interest. This makes it a great source of emergency funding (as long as your bank doesn't require any minimum withdrawals).
For example, if you have lost your job and need cash but have capital in your home, taking out a HELOC may be a good option. A home equity line of credit (HELOC) is a line of credit secured by your home that provides you with a revolving line of credit that you can use for major expenses or to consolidate debts with higher interest rates on other loans such as credit cards. You can use the capital to obtain low-cost funds in the form of a second mortgage, either a one-time loan or a revolving home equity line of credit (HELOC). The interest rate is usually lower than other forms of credit and the interest you pay may be tax-deductible; however, it is important to consult a tax advisor.
As you repay your outstanding balance, the amount of available credit is replenished in the same way as it is on a credit card. In addition, lenders generally analyze your credit score and history, work history, monthly income and monthly debts just like when you first got your mortgage. As with a home equity loan or HELOC, homeowners can use those funds to make improvements to their property or consolidate credit card debt. With a HELOC, you apply for a loan with the capital available in your home and the house is used as collateral for the line of credit.
Home equity loans and lines of credit can be useful for major home renovations, major living expenses and debt consolidation due to their flexibility and low rates. Generally speaking, you will get the best terms if you have a stable employment history and an excellent credit score. For this reason, it may also be worth considering employing a credit monitoring service as a means of keeping this information safe. No matter what big expenses you face in the future, a home equity line of credit from Bank of America could help you achieve your life priorities.
Like a credit card, a HELOC is a revolving line of credit that you pay interest on only for the part of the line that you use. You are taking out a new first mortgage so closing costs tend to be much higher than those of HELOCs which don't normally have high initial fees. However these charges will vary depending on the lender so it's important to compare prices before signing anything. HELOCs have many attributes that differentiate them from standard lines of credit and also offer advantages.
