How Does a HELOC Work?
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When you need to borrow cash to consolidate funds or purchase a big-ticket item, a home equity line of credit (HELOC) can help. A kind of revolving credit, a HELOC is secured by your home equity. This open-ended loan can be charged up or paid down during the loan term. The loan interest rate generally fluctuates every month
The lender will specify your credit limit (the largest amount you may borrow) in the HELOC. In determining the credit limit, your pay-rate, outstanding debt, credit status and additional monetary obligations will be taken into account. So that the lender is able to assess your home' current market value, you'll need an appraisal on your property. Your credit limit will be set on all of your financial information, as well as a percentage of your property's appraised market value, which is subtracted from the balance owed on your existing mortgage loan.
Pinnacle Lending Group, Inc. can answer questions about Home Equity Lines of Credit and many others. Give us a call at 7027302085.