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Find yourself dreaming vacation daydreams -- cruising the Mediterranean, touring Europe, or perhaps traveling to exotic Tahiti. The timing is right -- consider a home equity line of credit to turn these fantasies into reality. With the current prime rate of interest at only 4.75%, you can get away, right away. Vacations aren’t the only dreams that can come true. Money from a home equity line of credit can be used for debt consolidation, home improvements, investments or most anything you can imagine. There are many more advantages to having a home equity line of credit behind you. With a home equity line of credit, there is no limit to the number of times you can access your money. The amounts can vary with each check drawn on the account. Consider the line of credit called Prime for Life program, which allows you to take up to 90% of the equity available in your home. Furthermore, the line of credit has NO CLOSING COSTS or ADDITIONAL FEES. However, approval requires a good credit rating, accompanied by both income and asset information together with an appraisal to determine the value of your home. Once this process is complete (usually a week or two from approval to closing), you have the ability to draw down against the line of credit for up to 10 years. There is no re-qualification process and you can utilize these funds anytime for whatever you choose. Conveniently, this loan requires paying back interest only, and only for the first ten years, after which the principle balance remaining will be amortized on a 20-year term, based on a one-year treasury bill. The downside risk associated with any program of this type is the exposure to treasury market volatility. Historically, we have not seen a drastic swing in the prime rate. However, keep in mind it is not a fixed rate of interest. The intent would be to pay this loan down in a shorter period of time, prior to the loan becoming fully amortized, as there are no prepayment penalties involved. Furthermore, there are few sources we can turn to for low interest financing options such as this. Perhaps
it is time to think of Paris this year, Costa Rica next and even
the sun-drenched beaches of Tahiti. The prime rate at the time I
wrote this article was 4.75%. Get it while it’s hot! |
