What is a HELOC?
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If you want to borrow some money to consolidate funds or purchase a big-ticket item, a home equity line of credit (HELOC) may help. Using the equity in your home as collateral, a HELOC is revolving credit. 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 (usually monthly).
In a HELOC, your lending institution approves you for a particular amount of credit - the highest sum you are able to borrow at any one time. Your credit status, salary, debts and other financial circumstances will affect your credit limit. You will be required to schedule an appraisal to determine your home's up-to-date market value. Your credit limit will be set considering all of your financial information, in addition to a percentage of your home's appraised market value, which is subtracted from the balance owed on your existing mortgage loan.
At Alternative Mortgage Group, we answer questions about Home Equity Lines every day. Call us: 561-395-4264.