When you have a need for some extra money to make a major purchase, renovate your house, or pay the balance on a high-interest credit card, a HELOC (home equity line of credit) may be just what you're looking for. A HELOC is a form of revolving credit secured by your home equity. This open-ended loan may be be charged up or paid down over the set term of the loan. The loan interest usually changes every month
The lender will set your credit limit (the maximum amount you may borrow) in the HELOC. Your credit history, income, debts and other financial circumstances will affect your credit limit. An appraisal is required on your house to assess the property's present market value. Your credit limit will be set considering all of the above, in addition to a percentage of your property's appraised value, which is then subtracted from the balance owed on your present mortgage.
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