Can you please teach me about Heloc

Question

I want to take a Heloc but always was scared of it...

I want to open it just in case, sort of like if I lose my job, etc...

1) Do I understand correctly, if I open a HELOC but do not borrow the money, then this I do not owe any payments to the mortgage company? Lets say I open a HELOC for 50K and do not take anything out. Then I dont owe anything, right? But lets say, if I lose my job, and have no money to pay my mortgage, then I can use that money and only then I will be charged interest on it, right?

2) Are there any HELOC companies that open Heloc not on primary residence? (Besides PenFed, I have four properties and they dont do it for more than 3 properties)

Thank you guys!

Andrew Postell · Answer

@Mary Jay hello again.  More answers for you here:

1) Do I understand correctly, if I open a HELOC but do not borrow the money, then this I do not owe any payments to the mortgage company? Lets say I open a HELOC for 50K and do not take anything out. Then I dont owe anything, right? But lets say, if I lose my job, and have no money to pay my mortgage, then I can use that money and only then I will be charged interest on it, right? - Yes, you have this correct.  You do not pay interest unless you draw on your Line of Credit.

2) Are there any HELOC companies that open Heloc not on primary residence? (Besides PenFed, I have four properties and they dont do it for more than 3 properties) - Yes, but they are very hard to find.  Most lenders will call this sort of product on an investment property a "LINE OF CREDIT".  I know it's a small difference but if you call banks about HELOCs they may transfer you to their residential side not knowing any difference and then that side may not know that the commercial division will write them....so just ask for Lines of Credit when talking about investment properties.  You will probably need to ask in the Arizona forum (if that's where your properties are) for more suggestions on this type of a lending product.

Good luck!