Line of Credit
This is about as flexible as it gets when it comes to home loan products. This loan type is generally well suited to
borrowers with higher disposable incomes. The line of credit is set at a limit and secured against the equity in your home – usually a percentage of the property’s value.
These loans allow borrowers to draw funds as required to be used as they wish, whether it is for a new car, a holiday or investing in the share market. Interest on a line of credit is charged only on the funds that have been used.
While this might seem like a dream come true - and it is indeed one of the most flexible home loans on the market - a line of credit requires plenty of discipline in managing finances on the part of the borrower. This can be very difficult when you have such easy access to your funds.
Using funds to finance other purchases, such as cars, may impact on the time it takes to own your own home, but if you use the funds for investments with good returns, you can effectively build your wealth. It is very important to shop around for this type of loan as conditions and costs will vary, and seek expert advice from your Mortgageport Consultant about whether this is the right product for you and your circumstances.