When you have a need for some extra cash to make a major purchase, remodel your house, or pay off a high interest credit card, a HELOC (home equity line of credit) might be just what you're looking for. A HELOC is a kind of revolving credit secured by the equity in your home. This is an open-ended loan that can be paid down or charged up for the term of the loan, much like a credit card. The loan interest rate generally changes every month
With a HELOC, your lending institution will approve you for a predetermined credit amount - the maximum sum you may borrow at any given time with the agreement. In deciding the credit limit, your salary, outstanding debt, credit history and any other financial circumstances will be considered. You will be required to do a home appraisal to determine your home's present market value. Your property's up-to-date value, subtracted from your remaining mortgage balance will help to set your specific credit limit.
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