Home Equity Line of Credit: the Facts
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If you need to borrow cash to consolidate debts or purchase a big-ticket item, a home equity line of credit (HELOC) might be useful. Using your home equity as collateral, a HELOC is revolving credit. This is an open ended 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 (usually monthly).
In a HELOC, the lender will approve you for a specific credit amount - the highest amount you may borrow at any one time under the plan. Your credit status, salary, debts and various other financial circumstances will determine your credit limit. So that the lender can ascertain your home' current market value, you are going to need an appraisal on your property. Your property's market value, subtracted from your remaining mortgage loan balance will help to determine your specific credit limit.
At SLI Mortgage, LLC, we answer questions about Home Equity Lines every day. Call us at (512) 731-8607.