Home Equity Line of Credit: the Facts
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A home equity line of credit (HELOC) can be helpful when you are looking a lump sum to remodel your home, make a major purchase, or consolidate debt. A HELOC is a kind of revolving credit secured by the equity in your home. This is an open-ended loan that may be paid down or charged up for the a set length of time, similar to a credit card. The interest rate fluctuates (generally monthly).
The lender will specify your credit limit (the maximum you may borrow) in the HELOC. Your credit status, income, debts and other financial information will determine your credit limit. In order to ascertain your property's current market value, you will need an appraisal on your property. Your credit limit will be set on all of the above, as well as a percentage of your property's appraised market value, which is then subtracted from the balance owed on your present mortgage loan.
At Alternative Mortgage Group, we answer questions about Home Equity Lines every day. Call us at 561-395-4264.