Home Equity Line of Credit: the Facts
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A home equity line of credit (HELOC) can be useful when you are needing to borrow a lump sum to renovate your home, make a big purchase, or consolidate debt. Using your home equity as collateral, a HELOC is revolving credit. This open-ended loan may be be charged up or paid down during the loan term. The rate of interest changes (typically monthly).
The lender will determine your credit limit (the maximum you can borrow) with the HELOC. Your credit status, rate of pay, debt and various other financial circumstances will affect your credit limit. You are required to schedule an appraisal of your home to assess your home's current value. Your credit limit will be determined on all of your financial information, as well as a percentage of your property's appraised value, which is then subtracted from the balance owed on your existing mortgage loan.
American Commerce Mortgage can answer questions about Home Equity Lines and many others. Give us a call: 714-970-9700.