HELOC help - What am I missing?
Mortgage remaining - 35k @ 2.9%
Cash/TFSA/Inheritance etc. after tax = 36K
I could take the cash(35k from the 36k) and pay off my mortgage.
Then take out a HELOC for 65% of the accessed value of the property at say 2.9% = 71.5k
I could then take out the 35K from this 71.5K to replenish my cash/tfsa etc and pay 2.9% interest.
My understanding/questions on the HELOC:
- There is a draw period and repayment period. Is this correct?
- How long is a HELOC for? I hear 5-25 years?
- So during the draw period, I only have to pay interest? And then I have to pay the repayment?
- In my case above, I will have to payback the 35K with interest after the draw period?
- Could I just payback the 35K and then get a new HELOC so basically constantly staying in a draw period?
Can someone suggest a reliable source - person/.website etc. for this sort of info?