How Does a HELOC Work?
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A home equity line of credit (HELOC) can be useful when you are looking a lump sum to remodel your home, make a major purchase, or consolidate debt. A HELOC is a form of revolving credit secured by the equity in your home. This open-ended loan can be charged up or paid down during the set term of the loan. The interest rate changes (generally every month).
The lender will set your credit limit (the maximum amount you may borrow) with the HELOC. In deciding the credit limit, your pay-rate, outstanding debt, credit status and other financial circumstances will be considered. An appraisal will be required on your home to assess the home's market value. Your home's market value, subtracted from your remaining mortgage balance will help to set your specific credit limit.
Alternative Mortgage Group can answer questions about Home Equity Lines of Credit and many others. Call us at 561-395-4264.