Home Equity Line Of Credit-A Quick Overview
To borrow a sum of money against your equity is popularly known as home equity line of credit (sometimes abbreviated to HELOC).
What is home equity? Well, it is actually pretty simple. The different between how much you owe on your mortgage and the value of the home is it’s equity. You can use this amount to reconstruct or renovate your home, pay your medical bills, finance a newly purchased home, consolidate your high interest debts, or for higher education of any of your family members.
Is a home equity line of credit is perfect for you?
If you are in need of money, equity home lines might be a good solution. First of all, they offer you big cash at comparatively low interest rates. They can even offer you certain tax deductions, which are not available with other kinds of credits.
At the same time, equity credit lines use your home as collateral. This step by the financial companies may put your home at risk. If you are unable to refinance within the specified time, you might end up losing your home. At the same time, home equity line of credit offers you easy access to money at times of need.
How much money can you borrow?
The amount of money depends on factors like:
- Monthly income
- Credit rating
- Outstanding debt
- Value of your home equity
- The term you are seeking
How to find a low rate
- You should shop around for the best rate available. Try different sources like brokers, banks, and credit unions.
- Don’t forget to try online to match the available best interest rates.
- Compare your rates with rates available in advertisements.
A little bit of research will surely get you a better home equity line of credit.
