Home Equity Line of Credit: the FactsIn the market for a new mortgage? We will be glad to help! Call us at 303-220-7500. Ready to begin? Apply Here.
If you need to borrow some money to consolidate funds or make a large purchase, a home equity line of credit (HELOC) may help. Using your home equity as collateral, a HELOC is revolving credit. This is an open ended of loan that may be paid down or charged up for the term of the loan, similar to a credit card. The loan interest rate usually fluctuates monthly
The lender will set your credit limit (the maximum you can borrow) in the HELOC. Your credit status, income, debts and various other financial circumstances will affect your credit limit. An appraisal is required on your home to determine the home's present market value. Your credit limit will be determined considering all of the above, in addition to a percentage of your home's appraised value, which is then subtracted from the balance owed on your present mortgage loan.