HELOC Home Equity Loan
A HELOC loan requires that you use your home as collateral. This may put your home at risk if you are late or cannot make your monthly payments.
A HELOC can usually provide you with large amounts of cash at relatively low interest rates (since the loan is secured), and may also provide you with certain tax advantages unavailable with other kinds of loans.
If the home involved is your principal dwelling, the Truth in Lending Act gives you 3 days from the day the account was opened to cancel the credit line. This right allows you to change your mind for any reason. You simply inform the lender in writing within the 3-day period. The lender must then cancel its security interest in your home and return all fees–including any application and appraisal fees–paid to open the account.
Negotiate with at least four (4) lenders. Don’t be afraid to make lenders and brokers compete for your business by letting them know that you’re shopping for the best deal. Ask each lender to lower the points, fees or the interest rate. And ask each to meet — or beat — the terms of the other lenders.
Financial contracts can be very confusing. Before signing yourself to a major long term commitment have an attorney, familiar with financing and taxes, examine and explain the details (where the Devil is). A good tax finance attorney can save you many times his fee over the years, not to mention possible legal problems.
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