What is a HELOC Loan?
Here are a few buzzwords that are thrown around in the home lending industry often. You my hear of a HEL or a HELOC. HELOC is just the short form of Home Equity Line of Credit meaning an open-end line of credit. A home equity line of credit (Heloc) is a revolving line of credit with an adjustable interest rate which is indexed to the prime rate. Another form of a Heloc is a fixed-rate loan that allows you to leverage the equity in your home into cash, refinancing or to consolidate debt. Home equity lenders give you a line of credit up to 85% of your appraised homes value, minus the current mortgage loan balance. This of course is decided on your credit and your amount of debt. What can a Heloc do for me? You can get a loan at a lower interest rate than other loans and be able to get cash to use the way you want: Benefits of the HELOC loan • Low Interest Rate • Large sum of cash to spend, A HELOC is normally considered the cheapest source of cash • Different ways to access your line of
