Mortgage House - Line of Credit Home Loans

A Line of Credit home loan allows you to borrow money up to a specified limit, repay that amount and then borrow up the limit again numerous times.

There are two options to choose from with a Line of Credit home loan:

1.Principal and Interest Line of Credit - with a reducing balance, meaning every dollar goes towards paying down your home loan sooner, saving you years on your loan and thousands of dollars in interest.

The benefit of this option is that you avoid the common trap with a Line of Credit where you don't pay down the principal and find yourself still owing the full loan amount 10 years into the home loan.

2.Interest Only Line of Credit - where the home loan credit limit remains constant for the 10 year interest only period on this fully transactional line of credit.

The benefit of this option is that you can use the equity in your home for an investment property, shares or other personal uses.

Advantages

You only pay interest on the amount of money you actually borrow, not on the full available balance
Once the Line of Credit has been established you are able to access the funds when required without delay
Once the borrowed amount has been repaid, you have access to the full Line of Credit amount again
Useful for times of sporadic cashflow or short term finance

Disadvantages

Interest only repayments on a line of credit home loan can result in you still owing the full amount, years into the home loan as you would not have paid off any of the principal
A secured line of credit home loan means that you put your property up as collateral and nonpayment of your line of credit may result in the full amount of the line of credit being added to your home loan and the closure of your line of credit

Line Of Credit Home Loans

For further information, including interest rates and product features, please click on Equity Gold Line of Credit Home Loan.