What is a HELOC?
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A home equity line of credit (HELOC) can be useful when you are needing a lump sum to renovate your home, make a big purchase, or consolidate debt. A type of revolving credit, a HELOC is secured by the equity in your home. This is an open ended of loan that can be paid down or charged up for the a set length of time, similar to a credit card. The rate of interest fluctuates (typically monthly).
In a HELOC, your lender will approve you for a particular credit amount - the maximum amount you are able to borrow at any given time. In setting your credit limit, your income, debts, credit history and other financial circumstances will be taken into account. An appraisal is needed on your house to assess the home's current market value. Your credit limit will be set on all of the above, in addition to a percentage of your home's appraised market value, which is then subtracted from the balance owed on your existing mortgage.
American Commerce Mortgage can walk you through the process of getting a Home Equity Line. Call us: 714-970-9700.