If you’re looking for a flexible way to borrow against your home equity, consider a home equity line of credit (HELOC) from CrossCountry Mortgage. You’ll get a line of credit to pull funds from as-needed instead of receiving a lump sum of cash. Interest is only assessed on the amount you draw to keep borrowing costs low and make the loan more manageable. Best of all, you can use the funds to fund costly home improvements that will increase your home’s value, consolidate debt, cover emergency expenses or meet other financial goals. Here’s what else you need to know about these home equity products and why applying for one could be a smart financial move.
Brief Background of CrossCountry Mortgage
CrossCountry Mortgage is a leading mortgage lender offering purchase, refinance and home equity solutions nationwide. It currently operates in all 50 states with more than 800 branches and 7,000 employees. The direct lender is also BBB-accredited and holds an excellent rating with Trustpilot.
Since its inception, CrossCountry Mortgage has been dedicated to providing personalized service and flexible home loan solutions to borrowers nationwide. It also provides helpful resources to guide you through the borrowing process.
With their wealth of knowledge and experience, you can trust CrossCountry Mortgage to provide clear guidance and support when deciding if a HELOC is the right choice for you.
What is a CrossCountry Home Equity Line of Credit (HELOC)?
A HELOC from CrossCountry Mortgage is a convenience funding option for homeowners with significant equity in their homes. It is a flexible line of credit that’s secured by a home and acts as a second mortgage. You access funds up to the credit limit whenever you need them, and you’ll only be on the hook for interest on the amount you borrow.
CrossCountry requires a 670 FICO score or higher to qualify. You will also need a healthy debt-to-income ratio and may have to get a home appraisal before obtaining a HELOC. You can borrow up to 80%-85% of your home’s value. This limit also includes your existing mortgage. For instance, if you have a $500,000 mortgage on a $1 million home, you can borrow a HELOC of up to $300,000 to $350,000. The maximum line of credit depends on your credit score, DTI ratio, and other factors.
How Does a CrossCountry Home Equity Line of Credit (HELOC) Work?
With a home equity line of credit, you’re granted a revolving line of credit that you can draw upon as needed instead of obtaining a lump sum loan. CrossCountry Mortgage evaluates the amount of equity you have in your home and sets a credit limit based on this figure. This means you can access funds up to that limit as needed.
Withdrawals are limited to what’s referred to as the draw period. During this window, which typically lasts between five and ten years, you have the option to make interest-only payments on the principal balance. But once the draw period ends, you’ll be responsible for principal and interest payments.
Interest rates on HELOCs are generally variable. So, you’ll get a fluctuating monthly payment during and after the draw period ends. CrossCountry Mortgages gives select borrowers the option to refinance HELOCs for an extra five to 10 years. However, a home appraisal is required to exercise this option.
CrossCountry HELOC Example
Let’s assume a homeowner needs to make important home repairs, but those will cost $50,000. This homeowner doesn’t have enough cash in their savings account to fund the repairs.
While a personal loan is one option, this financial product has a higher interest rate than a HELOC. A traditional home equity loan is another option, but this loan product has high monthly payments right at the start.
The homeowner in this scenario opts for a HELOC to make interest-only payments at the start. It’s a good option for keeping payments low in the beginning. This individual’s property is worth $800,000, and the balance on the current mortgage is $400,000.
That gives the homeowner enough room in their LTV ratio to borrow $50,000 against their property. Monthly mortgage payments continue, and the homeowner only has to pay interest during the HELOC’s draw period. The extra funds make it financially feasible to make repairs right away. Then, the homeowner can choose to pay off the HELOC before the repayment period concludes or have the remaining balance converted into an installment loan.
Some financial products have short terms, but a HELOC’s draw term is 10 years. You’ll receive the lump-sum payment right away and can then make small minimum monthly payments. However, interest can accumulate if you don’t pay it off for a while, especially since most HELOCs have variable rates.
What Can You Use a CrossCountry HELOC For?
Set Up Emergency Fund
An emergency fund helps you prepare for the unexpected. A HELOC from CrossCountry Mortgage gives you a safety net to access when life happens. It can also help you maintain financial stability through unforeseen circumstances like job loss, medical emergencies or costly home repairs.
Pay for Tuition
Educational costs can be overwhelming, but you can use your HELOC to ease the burden of tuition fees. Borrowing against your home’s equity allows you to invest in your or your child’s education without dipping into your savings or taking out high-interest loans.
Renovate Your Home
Home renovations can significantly increase your property value and enhance your quality of life. With a HELOC, you can finance various home improvement projects, from kitchen and bathroom upgrades to landscaping. Doing so can help you to potentially maximize the return on investment when selling your property in the future.
Consolidate Bills
Managing multiple higher-interest debt obligations can be overwhelming and financially draining. With a CrossCountry HELOC, you can consolidate your bills into one lower-interest payment, making it easier to manage your finances. This strategy helps streamline the debt payoff process and can potentially save you a bundle in interest over time.
The HELOC also has a generous repayment plan if you are tight on cash. You initially only have to pay off interest during the draw period, which lasts 10 years. HELOCs usually have lower interest rates than unsecured financial products like credit cards and personal loans. However, paying off your HELOC early will strengthen your credit report and improve your chances of getting better terms for future financial products.
Buy Another Property
Many real estate investors use the equity from their investments to afford the down payments for additional properties. An investor’s scalability partially depends on how much equity they have in each of their properties and if they generate positive cash flow.
Any disruptions to positive cash flow can create considerable financial stress if you overleverage. However, it’s possible to achieve long-term financial goals sooner if these properties continue to generate profits. Home buyers can also opt to purchase a secondary home with a HELOC instead of committing to real estate investing.
What are the Eligibility Requirements for a CrossCountry HELOC?
Before applying for a HELOC, it’s vital to understand what CrossCountry Mortgage will consider. Here’s a brief overview so you’ll know what to expect:
- Credit score: You’ll generally have better approval odds with a high credit score. If it’s on the lower end, a cash-out refinance may be ideal to pull equity from your home. You can improve your credit score with on-time payments and by paying off your debt balances.
- Home value: The lender also prefers homeowners who have a sizable amount of equity in their properties. Otherwise, you may only qualify for a small HELOC loan or be denied financing altogether.
- Debts: Your current debt load, including any outstanding mortgage balances, will be considered when determining your eligibility for a HELOC. A smaller debt load will result in an annual percentage rate that is closer to the prime rate.
- Income: Borrowers should have a consistent, verifiable stream of income along with a steady work history. You must also demonstrate the ability to afford monthly HELOC payments.
The Benefits of a CrossCountry Home Equity Line of Credit (HELOC)
Customization
One of the key advantages of a CrossCountry HELOC is the customization options it offers. Depending on your financial needs and preferences, you can choose between an adjustable or fixed interest rate.
Convenience
A CrossCountry HELOC offers convenience by allowing you to access funds as you need them. With credit limits based on your home equity, you have access to a sizable amount of funds for various uses. Even better, HELOC interest rates are usually lower than those on credit cards, making it a less costly borrowing option.
Accessibility
You can easily access your funds through a cross-account transfer, which allows you to make an ATM withdrawal, initiate an electronic payment or swipe your card at the point of sale. This feature means you can obtain the money you need promptly and without unnecessary complications.
Flexibility
Another significant benefit of a CrossCountry HELOC is its flexibility. You are in control of how much you borrow and how you use the funds. This versatility allows you to better manage your finances and adjust your borrowing according to your needs. You also don’t pay interest until you borrow against the line of credit.
Tax Deductions
The interest paid on your CrossCountry HELOC may be tax deductible if you use the funds for home improvements. This tax benefit can lead to savings when filing your tax return. Be sure to consult with a tax professional to learn more.
How Does a CrossCountry Mortgage HELOC Stack Up?
The mortgage lender’s rate quote and loan types are competitive. It’s still a good idea to apply for HELOCs from multiple financial institutions so you can find the right lender for your financial situation. Some mortgage lenders have lower credit score requirements than CrossCountry, but a lower minimum FICO score usually comes with a higher rate.
CrossCountry has a straightforward Home Equity Line of Credit Application that only takes a few minutes to fill out. You can get a lower rate while tapping into more of the equity of your home.
Is a CrossCountry Home Equity Line of Credit (HELOC) Worth It?
This flexible funding solution could be worth it if you have a significant amount of equity in your home and meet the eligibility guidelines. You should also have the means to afford the monthly loan payments. Otherwise, you risk overborrowing and losing your home to foreclosure if you default on the loan agreement.
Get a Home Equity Line of Credit (HELOC) with CrossCountry Mortgage
When you’re ready, answer a few questions on this online form to request a free, no-obligation call with one of CrossCountry mortgage loan officers to learn more about their HELOCs or other mortgage products that could work for your financial situation.
Other CrossCountry Mortgage Products
CrossCountry Mortgage Purchase Loans
CrossCountry Mortgage also provides a variety of purchase loan options to fit your needs. From conventional loans to government-backed options such as FHA, VA, and USDA loans, they have a range of products available. The knowledgeable lending team can help guide you through the process of finding the right mortgage for your situation.
CrossCountry Mortgage Refinance Loans
If you’re looking to lower your monthly payments, change the term of your loan, or tap into your home equity, CrossCountry Mortgage also offers refinance loans. You can choose from traditional refinance options, such as fixed-rate or adjustable-rate mortgages. If you have an FHA, VA, or USDA loan, you may also be eligible for a streamlined refinance, simplifying the lending process and often requiring less documentation.
