Home Equity Line of Credit: the Facts

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When you need some extra money to make a big purchase, renovate your house, or pay off a high interest credit card, a HELOC (home equity line of credit) might be just what you're looking for. A HELOC is a type of revolving credit secured by the equity in your home. This open-ended loan can be charged up or paid down during the loan term. The loan interest rate typically fluctuates monthly

The lender will set your credit limit (the highest amount you can borrow) in the HELOC. Your credit history, rate of pay, debt and other financial information can determine your credit limit. So that the lender is able to assess your home' present market value, you'll need an appraisal on your home. Your property's up-to-date value, subtracted from your remaining mortgage balance will help to determine your particular credit limit.