HELOC – Home Equity Line of Credit

This equity take out loan can be setup for up to 100% of your property value and is considered to be a revolving vehicle – meaning you can draw it down and pay it off at any time.  You will also have the ability to use a fixed rate in the product with interest calculated monthly.

Mortgages on your primary residence have the most flexibilities and depending on the lender, can even be split-up into segments for estate planning and various loan options.

There are no penalties to pay off your mortgage at any time and the interest on the loan will be calculated monthly.  This is a great benefit for those who wish to put down extra lump sum amounts on to their mortgage in an effort to pay it off sooner.  Because the interest calculates monthly, your principal portion of your regular payments will increase, and the interest will decrease based on the extra payments you make.

Fixed rates can be locked in for 5, 10, 15, 20 or 30 years and can match your amortization schedule too.

If you are wanting to purchase a residence as a rental you will need to have 20% down as a deposit.  Private mortgage insurance or FHA mortgages are not permitted on investment properties.  If you plan to turn your primary residence into a rental, you will need to ensure you own 22% equity since most banks will not want to lend above 78%.