WHAT IS AN EQUITY LINE OF CREDIT?Tom Uhlich
These loans are a great way to access the equity in your home to use for things like home renovations, investments or other personal purchases. Repayments on a line of credit loan are determined by the interest rate applicable at that time. If you have sufficient equity in your home, you will need to make a separate application for a line of credit loan.
You have the added advantage of being able to make unlimited deposits / repayments as you repayments are not set. You must check the conditions of these loans as they are sometimes more expensive than standard products.
A line of credit is also a popular product with property investors as it gives them instant access for a cash deposit, and the ability to keep their properties separate from each other i.e. not cross secured.
Think of it like a gigantic credit card with a limit. So planning and caution is strongly advised.
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