How Does a HELOC Work?
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A home equity line of credit (HELOC) can be useful when you are looking a lump sum to remodel your home, make a large purchase, or consolidate debt. A kind 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 rate of interest changes (generally every month).
In a HELOC, your lending institution will approve you for a specific credit amount - the highest sum you are able to borrow at any given time with the agreement. In determining your credit limit, your salary, outstanding debt, credit status and other monetary circumstances will be taken into account. You will be required to have a home appraisal to determine your home's present market value. Your property's market value, subtracted from your remaining mortgage balance will help to determine your specific credit limit.
American Commerce Mortgage can walk you through the process of getting a Home Equity Line of Credit. Give us a call at 714-970-9700.