What is a HELOC?
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If you need to borrow some money to consolidate debts or buy a big-ticket item, a home equity line of credit (HELOC) might be useful. A type of revolving credit, a HELOC is secured by your home equity. This is an open ended of loan that can be paid down or charged up for the term of the loan, similar to a credit card. The rate of interest changes (generally every month).
With a HELOC, your lender will approve you for a predetermined amount of credit - the highest amount you can borrow at any one time. Your credit status, income, debts and other financial information can affect your credit limit. In order to ascertain your house's current market value, you will need an appraisal on your property. Your credit limit will be set on all of your financial information, as well as a percentage of your property's appraised value, which is subtracted from the balance owed on your existing mortgage.
At Prestige Home Mortgage, we answer questions about Home Equity Lines every day. Call us at 360-576-1920.