Did you know?

Having a big balance on your home equity line of credit (HELOC) might not be the smartest financial move – unless you have a plan to pay it off faster than your pre-payment options allow. Let’s break it down.

Many lenders offer pre-payment options that allow you to pay an additional 10-20% of your mortgage balance each year without penalty. This can be a game-changer when it comes to paying down your mortgage faster and saving on interest costs in the long run.

Now, here’s the kicker: home equity lines of credit often come with higher interest rates, sometimes 1% or more above your mortgage rate. That might not sound like much, but over time, it can really add up.

So, picture this: you’ve got a hefty balance sitting on your HELOC, racking up interest at a higher rate than your mortgage. Meanwhile, your mortgage allows you to make extra payments to chip away at that principal balance and save on interest.

That’s where the lightbulb moment comes in. Consolidating that HELOC balance into your mortgage could be a savvy move. By rolling it into your mortgage, you could potentially lock in a lower interest rate and take advantage of those pre-payment options to pay it off faster.

Not only could you save money on interest, but you’ll also streamline your debt and simplify your finances. It’s a win-win situation.

So, before you resign yourself to carrying that big balance on your HELOC, take a moment to explore your options. Consolidating it into your mortgage could be the key to financial freedom you’ve been looking for.