When you have a need for some extra money to make a large purchase, remodel your house, or pay the balance on a high interest credit card, a HELOC (home equity line of credit) may be just what you need. A HELOC is a type of revolving credit secured by your home equity. This is an open ended loan that may be paid down or charged up for the a set length of time, similar to a credit card. The interest rate fluctuates (usually monthly).
Your lender will determine your credit limit (the biggest amount you may borrow) with the HELOC. Your credit history, income, debts and other financial information will determine your credit limit. An appraisal is needed on your house to assess the property's current market value. Your property's market value, subtracted from your remaining mortgage loan balance will help to set your particular credit limit.
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