What is a home equity line of credit?
A home equity line of credit is a loan that allows you to use equity on your home. The Home Line of Credit works like an evolving credit where you can choose combines and when you want to borrow. The Good Finance home equity line of credit is referred to as a versatile line of credit.
What is the interest rate on Good Finance’ versatile line of credit?
The interest rate for Good Finance’ versatile line of credit is based on a prime rate, which is currently 3%. Good Finance does not publish the interest rate on their website, and after talking to two advisors, Good Finance only specifies that the rate changes according to each individual.
Because the variable interest rate is dependent on the prime rate, if Good Finance offers you a premium rate of + 1.50%, your interest rate on the versatile line of credit would be 4.50%
Once you qualify for Good Finance’ versatile line of credit
You can borrow from $ 25,000 up to 80% of the value of your home. It is important to note that the total debt on your property (mortgage + home equity line of credit) can not exceed 80% of the value of your home, in order to borrow up to 80% of the value of your home then, your mortgage should have been paid in entirety.
Access to the fund at an ATM, online, by phone, by check, or at any Good Finance branch.
- A variable rate lower than any other rate on a personal line of credit
- The interest rate is calculated daily, then you will pay just the interest on the amount you used
- The repayment period is flexible with daily, weekly, monthly options to choose from
- You can choose to pay a percentage of the monthly balance, a fixed or variable rate, where just the monthly interest
- There are no prepaid penalties. You can pay the full amount owed, whatever you want, without extra charges.
The value of your home = $ 350,000
- The amount still due on your mortgage = $ 175,000
The total maximum loan amount would be calculated as:
$ 350,000 x 80% loan-to-value ratio = $ 280,000
Then you have to subtract the additional amount on your mortgage to have a total of the amount you can borrow on your line of credit.
$ 280,000 – $ 175,000 = $ 105,000
The maximum amount of equity you could have on your home
Is $ 105,000 using Good Finance’ versatile line of credit. You can use our Mortgage Payment Calculator to do the exercise at home.
Good Finance’ versatile line of credit is a deductible product of your mortgage that can help you access funds to finance your renovation projects, invest in a retirement fund, or even buy a second property.
A home equity line of credit can be used to pay other high interest debts such as credit cards and car loans. Before deciding to borrow on your property, you should speak with an experienced mortgage broker and make a decision that best suits your financial situation.