If you’ve built up a bit of equity in your home and you’re looking to access additional funds, the SCU Home Equity Overdraft gives you access to a flexible line of credit that you can use if and when you want to through complete transaction access.
A line of credit loan works similarly to a credit card where the bank will give you access to an approved limit of funds that you can draw down on at your leisure.
You have the option of paying back the interest on your loan at weekly, fortnightly or monthly intervals – however, the variable interest rate is high.
The Home Equity Overdraft will lend you up to 70 percent of your property’s value at the allowed minimum borrowing amount.
If you want added security, you can pay extra for loan repayment insurance which would cover your repayments if you have a change in employment or if an unforeseen circumstance crops up and affects your ability to repay.
This equity loan is not available to investors and is available for owner-occupiers.
The SCU Home Equity Overdraft is not available to investors and are for owner-occupiers who have built up enough equity in their property in order to meet the minimum borrowing amount for this loan.
Since an equity overdraft loan gives borrowers access to a flexible line of credit which they can use for alternative investments and purchase like cards, renovations or debt consolidation, it’s better suited for savvy spenders who keep a close eye on their finances.
Home equity line of credit loans are a double-edged sword and should always be treated with a certain degree of caution, as you’ll essentially have access to a large balance of readily available funds.
It can be easy to give into temptation and over time end up with a large loan balance that accrues interest.
Generally speaking, equity loans don’t have as many bells and whistles as traditional home loans and the interest rates are higher due to the increased risk and availability of funds.
It’s a good idea to take a close look at your finances or even to consult a professional who can help you decide if the SCU Home Equity Overdraft is the home loan option that will pay off for you in the long run.
Find more information about the Home Equity Overdraft Loan from SCU below.