A home equity line of credit (HELOC) can be helpful when you are hoping a lump sum to renovate your home, make a large purchase, or consolidate debt. A kind of revolving credit, a HELOC is secured by your home equity. This is an open ended of loan that may be paid down or charged up for the a set length of time, much like a credit card. The rate of interest can fluctuate (typically monthly).
Your lender will determine your credit limit (the maximum you may borrow) with the HELOC. Your credit status, rate of pay, debts and other financial circumstances will determine your credit limit. You will be required to do an appraisal to assess your home's current value. Your credit limit will be determined considering all of your financial information, in addition to a fraction of your property's appraised value, which is then subtracted from the balance owed on your present mortgage.
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