Home Equity Line of Credit: the Facts

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If you need to borrow some money to consolidate funds or purchase a big-ticket item, a home equity line of credit (HELOC) can be useful. A HELOC is a form of revolving credit secured by your home equity. This is an open-ended of loan that can be paid down or charged up for the a set length of time, similar to a credit card. The loan interest rate usually fluctuates every month

Your lender will determine your credit limit (the highest amount you may borrow) with the HELOC. In deciding your credit limit, your income, debts, credit history and other financial obligations will be considered. You are required to have an appraisal of your home to determine your home's up-to-date market value. Your property's up-to-date value, subtracted from your remaining mortgage balance helps to determine your particular credit limit.