Home Equity Line of Credit: the Facts
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A home equity line of credit (HELOC) can be helpful when you are needing a lump sum to remodel your home, make a large purchase, or consolidate debt. Using your home equity as collateral, a HELOC is revolving credit. This open-ended loan can be charged up or paid down over the set term of the loan. The rate of interest fluctuates (typically every month).
In a HELOC, your lender approves you for a predetermined amount of credit - the maximum sum you are able to borrow at any one time with the agreement. Your credit status, rate of pay, debts and other financial circumstances will affect your credit limit. You will be required to schedule an appraisal of your home to assess your home's present market value. Your credit limit will be based considering all of your financial information, as well as a fraction of your home's appraised value, which is subtracted from the balance owed on your existing mortgage.
At Straight Talk Lending, we answer questions about Home Equity Lines of Credit every day. Call us at 714-737-6717.