ING DIRECT Home Equity Line of Credit (HELOC) ? Shannon ...

On December 10^th, 2011, ING DIRECT added a Home Equity Line of Credit to their suite of financial products.

What is a home equity line of credit?

A home equity line of credit, or HELOC for short, allows you to borrow money by leveraging the equity you?ve put into your home. The HELOC functions like a regular line of credit, so you can choose when and how much money you wish to access.

What is the ING DIRECT HELOC interest rate?

The interest rate on an ING DIRECT Home Equity Line of Credit is 3.65 per cent or ING Prime + 0.65%. Interest is accrued daily on the outstanding balance and is charged every month.

The details

The maximum amount of credit is determined by a loan-to-value ratio. ING DIRECT is one of the last lenders in Canada to service 80 per cent loan-to-value (LTV) ratios on HELOC mortgages. However, ING DIRECT is set to reduce the maximum LTV to 65 per cent by December 31^st, 2012, as per Canadian finance regulations.

Features:

• No monthly fees
• Minimum HELOC amount is $15,000
• Your minimum monthly payment is interest only
• The line of credit can be paid back at any time. ING DIRECT has a Fixed Payback Plan, which allows you to setup regular fixed payments to accelerate your debt repayment.
• Full 24-hour online access to your account
• You can decrease your limit online
• The line of credit can be attached to an external chequing account, i.e. a non-ING DIRECT account
• You can transfer the HELOC to another property without fees
• ING DIRECT covers most of the appraisal fees
• If you and your spouse both own the property, the HELOC account can be under both names
• The property must be a principal residence

Sample calculation

The value of your home = $400,000

Your outstanding mortgage balance = $250,000

The maximum available credit is calculated using an 80% loan-to-value ratio:

$400,000 x 80% = $320,000

However, you must also subtract your outstanding mortgage balance:

$320,000 ? $250,000 = $70,000

The maximum amount of equity you could pull from your home is $70,000, using an ING DIRECT Home Equity Line of Credit.

The final word

An ING Home Equity Line of Credit can be a useful source of funds to finance a variety of things such as:

• Paying off high interest rate debts, such as credit cards or car loans
• Using it to finance home renovation projects
• Investment funding

It is best to discuss whether a HELOC mortgage is a suitable form of financing for you by speaking to an experienced mortgage broker. Remember, a home equity line of credit is still debt that needs to be handled with discipline, including a plan to repay the debt entirely.

Source: http://www.extraordinarywomentv.com/topics/ing-direct-home-equity-line-of-credit-heloc/

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