Why is an equity line an advantageous financing tool?

• Tax Advantages
  One reason that equity lines are so popular is that there are often tax advantages to their use. In most cases, the interest payments on home equity loans and lines of credit may be tax-deductible while interest on credit cards and most other types of loans are not. So, when you consider the after-tax cost of equity-secured credit, the savings can be substantial.
  
  For example, if the interest rate on a home equity loan of line of credit is 8% and you're in a 28% income tax bracket, the after-tax interest cost may be only 5.76%. Ask you tax advisor to see if you qualify for a tax deduction.
  
  Lower Interest Rates
  Another reason equity lines and loans are so advantageous is that the interest rates on these types of loans are generally lower than the rates on credit cards and other types of consumer loans. And since you can use a home equity loan or line of credit to buy almost anything, you can lower your cost of purchasing virtually anything by financing it this way.

• Crestar offers equity lines in conjunction with a first mortgage or as a stand alone product.
  
  Our standard stand-alone equity line is a revolving line of credit that you can access at any time. It's easy. With an equity line, you can use your line of credit over and over again, up to your available credit limit. And you'll pay interest only on the outstanding balance of your account.

• 1. An equity line is a smart choice if you expect to borrow more than once because it gives you the flexibility to borrow money whenever you want, up to the amount of your available credit line.
  
  2. An equity line is a smart choice if you want to maintain flexibility in the time period in which you repay your loan. Many equity loans require that a defined payback period and monthly payments be set at the beginning of the loan. With an equity line, you have a low minimum payment requirement which allows you the freedom to repay the loan as quickly as you can afford.

• It is possible to borrow up to 100% of the value of your property (all mortgage liens/appraised property value) depending on the value of your property and other circumstances of your application.
  
  The maximum line amount is $50,000 on the stand alone equity lines and $200,000 on the equity lines offered in conjunction with a Crestar first mortgage.
  
  The maximum property value is $500,000 on the stand alone equity lines and $750,000 with a sufficiently low loan-to-value ratio for the equity line offered in conjunction with a Crestar first mortgage.
  

  How long can I have to pay back the line?

  • The draw period is 10 years from the date of the agreement and may be extended one time by Crestar Bank. The repayment period, during which draws are not allowed, is 20 years.

   

  How are my monthly payments calculated?
  • Payments on the equity line in the draw period can be either:
    - interest only (minimum $50)
    or
    - .5% of balance plus accrued interest (minimum $50)
    
    During the repayment period, monthly payment are calculated by amortizing the principal balance over the 20 year period and calculating interest based on the movement of the index.

   

  Where can I find qualified contractors to help with the home improvements I want equity to help finance? http://www.homepoint.com/