Home Equity Line of Credit: the Facts
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A home equity line of credit (HELOC) can be helpful when you are looking to borrow a lump sum to renovate your home, make a large purchase, or consolidate debt. A HELOC is a kind of revolving credit secured by your home equity. This open-ended loan can be charged up or paid down during the set term of the loan. The loan interest typically changes every month
The lender will determine your credit limit (the maximum you may borrow) in the HELOC. In setting the credit limit, your income, outstanding debt, credit status and additional monetary circumstances will be taken into account. You are required to do a home appraisal to determine your home's up-to-date market value. Your property's current value, subtracted from your remaining mortgage balance will help to determine your particular credit limit.
At Real Property Finance, we answer questions about Home Equity Lines of Credit every day. Give us a call: 310-379-5997.