Home Equity Line of Credit: the Facts
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A home equity line of credit (HELOC) can be useful when you are needing to borrow a lump sum to remodel your home, make a large purchase, or consolidate debt. A HELOC is a type of revolving credit 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, much like a credit card. The rate of interest can fluctuate (usually monthly).
The lender will determine your credit limit (the maximum amount you may borrow) in the HELOC. In determining the credit limit, your income, outstanding debt, credit status and other financial obligations will be reviewed. You are required to do an appraisal to assess your home's up-to-date value. Your credit limit will be determined considering all of your financial information, as well as a fraction of your property's appraised value, which is then subtracted from the balance owed on your current mortgage.
At Valley Savers Mortgage, LLC, we answer questions about Home Equity Lines of Credit every day. Give us a call at (602) 332-9544.