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Home Equity Line of Credit (HELOC)

Updated: Nov 12, 2021

What is a HELOC and what can it do for me?

You can think of a HELOC as free money for anyone who owns a primary home with equity. Equity means you have some of your own money invested in your home.

A HELOC is awesome because you only pay interest on the money you borrow. The bank usually gives you a time window, like ten years, in which you can borrow the money and pay it back multiple times. You only pay interest on the money for the time you have it borrowed so you only pay when you use it. And a HELOC interest rate is usually very low. The rate on a HELOC is usually the prime interest rate plus 1%. So if the interest rate today is 2.25%, then the interest on a HELOC may be 3.25%. Banks vary their rates so it pays to shop around.

How is a HELOC free money?

If you take out a HELOC at 3% and lend it with us at 12%, you can keep keep 9% and pay back the 3%.

For example, say you take out a $100,000 HELOC at 3% and lend it with us for six months at 12%. You would make $6,000 by lending it with us but you would only have to pay back $1,500to the bank for the HELOC. You would keep $4,500 in your pocket! That is $4,500 of free money for you! What is stopping you??

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