 Sam
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 Posted: Sat Apr 10, 2004 3:54 am Post subject: Draw Period - Time frame for cash withdrawal from creditline |
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Draw period refers to the time period within which you can access the funds available from your home equity line of credit. Within the draw period, you can withdraw cash up to a certain credit limit as fixed upon by your lender or mortgage company.
The draw period also allows you to pay a minimum amount on your loan on a monthly basis. This payment includes mostly the interest charged on the amount withdrawn. But you can also pay off the principal, and avail further credit provided you are still within your credit limit and the draw period isn't over yet.
As the draw period expires, you can start repaying the loan in equal monthly installments of both principal and interest till you pay off the outstanding balance.
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