What is a HELOC?
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If you need some extra money to make a major purchase, renovate your home, or pay off a high interest credit card, a HELOC (home equity line of credit) may be just what you need. Using the equity in your home as collateral, a HELOC is revolving credit. This open-ended loan can be charged up or paid down during the loan term. The rate of interest can fluctuate (generally monthly).
With a HELOC, the lending institution approves you for a specific credit amount - the maximum sum you are able to borrow at any given time under the plan. In deciding your credit limit, your income, debts, credit history and any other financial circumstances will be reviewed. An appraisal is needed on your home to assess the home's market value. Your home's market value, subtracted from your remaining mortgage loan balance helps to determine your specific credit limit.
At Test, we answer questions about Home Equity Lines of Credit every day. Call us at 4054206125.