What the Heck is a HELOC, Anyway?

Breaking down HELOC basics

Could you use a little extra cash? In today’s tough economy, who couldn’t? This week on Money Wise, we’re exploring an increasingly popular method of borrowing – a home equity line of credit. The problem – many Canadians don’t know what they are, and with household debt levels at record highs, HELOCs can add even more fuel to the fire.

To debunk some of this confusion, we’ve broken down the basics of this borrowing tool, and pitted the pros and against the cons. Read to see if a HELOC is right for you.

What is a Home Equity Line of Credit?

One of the best perks of owning your home is all that lovely equity you build up through your mortgage payments. Did you know that you can tap into this equity and turn it into cash? It’s a tactic that works for many a borrower – but can put your mortgage underwater if not properly paid off.

If you’re considering a HELOC, get the lowdown on the basics first.

Read Allan’s Blog | What is a Home Equity Line of Credit?

Should You Get a HELOC? Pros and Cons

What would you do with thousands of dollars in extra cash – and no spending restrictions? HELOCs are great funding options for all sorts of milestones – many a kitchen has been remodeled with the help of one!

Sound too good to be true? Keep in mind that cash comes at a price – and payoff takes discipline. Read on for a list of HELOC pros and cons.

Read Diane’s Blog | Should You Get a HELOC? Pros and Cons

HELOCs: Part of Your Retirement Plan?

For Canadian Boomers, retirement represents a looming cost – one they may not be financially prepared for. One popular method of creating funds for post-work life is to take a HELOC or reverse mortgage out on your home.

Wondering how this would work? We’ve broken down the differences between these borrowing strategies, and what you should keep in mind when planning for the future.

Read Melanie’s Blog | Should a HELOC be Part of Your Retirement Plan?

And in this week’s headlines…

How the U.S. Fiscal Cliff Will Affect Canadians

The U.S. election has come and gone, with Barack Obama re-elected for his second term. Now, attention can be turned to the looming fiscal cliff, and the measures required to avoid it. What is the fiscal cliff, and how will it affect the Canadian and global economy?

Read Penelope’s Blog | How the U.S. Fiscal Cliff Will Affect Canadians

What is a Takeover Deal?

Hostile or friendly, takeover deals are big in the news right now – especially as the Canadian government ponders its involvement with some particularly big fish. What are takeover deals, and how do they impact the Canadian business landscape?

Read Rubina’s Blog | What is a Takeover Deal?

Understanding HELOC Variable Interest Rates

The concept behind a Home Equity Line of Credit (HELOC) is simple – leverage your home in return for a hefty line of credit to draw from. However, it’s the underlying challenges associated with HELOC variable interest rates that makes a HELOC a tool best reserved for the thrifty and financially astute.

Read Andrew’s Blog | Understanding HELOC Variable Interest Rates

90% of Young Canadians Experience Economic Stress

Young Canadians are increasingly worried over their finances with a full 90% reporting they experience stress over the current state of the Canadian economy. A recent survey from Sun Life Financial also finds that unemployment or underemployment are key factors behind these anxiety levels.

Read Andrew’s Blog | 90% of Young Canadians Experience Economic Stress

You Answered!

This week's poll

This week on Money Wise, we asked Canadians:

Would you consider taking out a HELOC on your home?

50.7% of respondents couldn’t say either way – because they’re unfamiliar with this kind of borrowing tool!

38% said they would pass on this borrowing tactic for now, in attempts to stem their household debt levels.

Only 11.3% of poll takers would consider taking one out – the revolving nature of the debt, coupled with no amortization make it an attractive option.

Check out next week’s question: What would you spend to increase your fitness level?

We want to know what you think – and there may be a FREE $25 gift card in it for you!

Is there a topic you’d like us to cover? Shoot us a comment, or visit us on Facebook and Twitter!

 

 

 

Related Topics

Mortgages / Mortgages 101

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