Problems with interest rates and repayments? Ask for home loan help.
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A home equity loan is a product type that could also be described as a personal overdraft secured against the equity in residential property.
Most major lenders have a product along these lines and the feature of the loan is they generally do not require a monthly repayment as long as they are operated within the approved limit, inclusive of monthly interest capitalization.
Lenders are fairly relaxed about the purpose of the borrowing as long as it is legal, not openly used for business purposes and some lenders are not happy for the product to be used to meet taxation payments especially those in arrears.
The product is often used to reduce overall interest on home loans by “parking” salary credits in the account and drawing them down when required, therefore decreasing the loan balance on which interest is calculated.
The product can have some drawbacks as some lenders charge a higher interest rate and/or service fee to have this account and undisciplined borrowers may fail to stick to a mortgage reduction program and never pay out the debt.
Call Your Local Finance mortgage broker on 1300 787 665 to discuss your options on this type of account.
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