When you need some extra cash to make a large purchase, renovate your house, or pay the balance on a high interest credit card, a HELOC (home equity line of credit) may be just what you need. Using your home equity as collateral, a HELOC is revolving credit. This open-ended loan can be charged up or paid down during the loan term. The loan interest generally fluctuates every month
The lender will specify your credit limit (the maximum you can borrow) with the HELOC. In determining the credit limit, your pay-rate, debts, credit status and other financial circumstances will be reviewed. In order to assess your property's present market value, you are going to need an appraisal on your property. Your credit limit will be based on all of your financial information, in addition to a fraction of your home's appraised market value, which is then subtracted from the balance owed on your existing mortgage loan.
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