What is a HELOC?
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A home equity line of credit (HELOC) can be useful when you are hoping a lump sum to renovate your home, make a big purchase, or consolidate debt. A HELOC is a kind of revolving credit secured by the equity in your home. This open-ended loan may be be charged up or paid down over the loan term. The interest rate changes (generally monthly).
In a HELOC, your lender will approve you for a predetermined credit amount - the highest sum you can borrow at any one time with the agreement. In deciding the credit limit, your salary, debts, credit status and other monetary circumstances will be considered. You will be required to do an appraisal to determine your home's up-to-date market value. Your credit limit will be determined on all of the above, as well as a fraction of your home's appraised market value, which is then subtracted from the balance owed on your present mortgage loan.
At F&T Mortgage, Inc. NMLS # 168839 (www.nmlsconsumeraccess.org), we answer questions about Home Equity Lines every day. Call us at 214-300-8756.