Flex Line of Credit Defined

Is a Flex Line of Credit a mortgage, personal loan or a credit card?

1 Answer

A flex line of credit can be any of the three you mentioned. It's a mortgage if the lender files a lien against your home. A HELOC is just that....Home Equity Line of Credit. The good news about a HELOC is that the interest expense can be tax deductable (if your financial situation qualifies per IRS). Some of the HELOC products are called FLEX or flexible because they offer interest only payments as well as optional amortization terms. The loan will also allow you the opportunity to pay the balance down and then increase the balance again at a later date.

Banks and Credit Unions routinely offer lines of credit as credit cards and / or personal loans. Credit Unions are more likely to offer personal loans than banks. Either one of these products will usually have higher interest rates than a HELOC.

You should ask your lender if they intend to file a lien against your home (this type of lien cannot be filed without your permission)

READ DOCUMENTS THOROUGHLY BEFORE SIGNING. Each one of these loan types can be valuable financial tools if properly used.....not abused.