Home Equity Line of Credit: the Facts
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A home equity line of credit (HELOC) can be helpful when you are hoping to borrow a lump sum to renovate your home, make a major purchase, or consolidate debt. A form of revolving credit, a HELOC is secured by the equity in your home. This is an open ended loan that can be paid down or charged up for the term of the loan, much like a credit card. The interest rate changes (typically monthly).
In a HELOC, the lending institution will approve you for a predetermined credit amount - the maximum amount you are able to borrow at any one time under the plan. In determining your credit limit, your pay-rate, outstanding debt, credit status and other financial obligations will be reviewed. An appraisal is required on your home to assess the property's present market value. Your credit limit will be set considering all of the above, in addition to a fraction of your property's appraised value, which is subtracted from the balance owed on your current mortgage loan.
Pacific Loan Brokers can walk you through the process of getting a Home Equity Line of Credit. Call us: 877-310-6200.
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