When you need to borrow some money to consolidate debts or purchase a big-ticket item, a home equity line of credit (HELOC) may be useful. A kind of revolving credit, a HELOC is secured by the equity in your home. This open-ended loan can be charged up or paid down over the set term of the loan. The interest rate fluctuates (usually monthly).
The lender will determine your credit limit (the maximum amount you can borrow) with the HELOC. Your credit history, income, debts and other financial information will affect your credit limit. An appraisal is needed on your house to determine the home's market value. Your property's market value, subtracted from your remaining mortgage balance will help to determine your particular credit limit.
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