When you need to borrow some money to consolidate debts or make a big-ticket purchase, a home equity line of credit (HELOC) may be useful. A form of revolving credit, a HELOC is secured by the equity in your home. 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 changes every month
The lender will specify your credit limit (the maximum you may borrow) in the HELOC. Your credit score, rate of pay, debts and various other financial information will affect your credit limit. An appraisal will be required on your house to assess the property's current market value. Your credit limit will be determined on all of your financial information, as well as a percentage of your home's appraised value, which is subtracted from the balance owed on your current mortgage loan.
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