home equity features
repayment terms
Home Equity Line of Credit
You
can choose how much to pay each month when your
statement comes due.
You can pay the minimum amount, the entire amount, or any amount in between. This is one of the greatest features of the home equity line of credit.
The minimum amount required may vary by lending institution. Make sure that the minimum payment required pays the entire interest charges for the month. You want to avoid negative amortization — this is where the payment does not cover interest charges for the period and any unpaid interest is added to your borrowed amount.
Home Equity Loan
Most lenders allow you to select the repayment term in months.
It may vary by your LTV position and the amount your borrow. Most terms range from 120-240 months (10-20 years).
There are a few exceptions where you can get longer terms.
Account Access Period
Home Equity Line of Credit
Varies
by lender. Many lenders allow access to your account for
up to 5-10 years with a renewable option.
If you choose not to renew, or if you fail to meet the renewal requirements, the line will close and the remaining balance will be due.
Some lenders will amortized your remaining balance over a fixed repayment period of 10-20 years. Again, this may vary by lender.
If the lender does not allow amortization at the end of the draw period, you will need to pay the balance due or face foreclosure on your home.
Home Equity Loan
N/A
Annual Percentage Rate
Home Equity Line of Credit
The Annual Percentage
Rate (APR) is calculated by taking a margin and
adding it to an a rate index, usually the PRIME
RATE. The rate may vary. Maximum
and minimum APRs vary by state.
Home Equity Loan
The Annual
Percentage Rate (APR) is a fixed rate determined
by the bank. The APR will not vary as it may with
the Home Equity Lines of Credit.
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