Home Equity Line of Credit: the Facts
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A home equity line of credit (HELOC) can be useful when you are looking to borrow a lump sum to renovate your home, make a major purchase, or consolidate debt. A form of revolving credit, a HELOC is secured by the equity in your home. This is an open ended of loan that can be paid down or charged up for the a set length of time, similar to a credit card. The interest rate changes (usually every month).
Your lender will specify your credit limit (the maximum amount you may borrow) in the HELOC. Your credit score, salary, debt and various other financial circumstances will determine your credit limit. An appraisal is needed on your house to assess the property's current market value. Your credit limit will be determined on all of the above, in addition to a fraction of your home's appraised market value, which is subtracted from the balance owed on your present mortgage loan.
My Mortgage Option can answer questions about Home Equity Lines and many others. Give us a call at 4693224391.