What is an Equity Line of Credit?
Equity lines of credit are based upon the difference of the value of the home and what is left owed on it. If a homeowner owes less than the fair market value then he or she may want to take out an equity line of credit to use against remodeling, home repairs, or for other needs. Lenders often offer some perks with taking out revolving credit on a home loan. These may include no annual fee, no closing costs, no application fee, and low interest. Approval for a loan will depend upon income, debts, and financial history. A homeowner should take into consideration that there will be a monthly payment on the equity line of credit that will need to be paid on time every month. As the funds are used from the balance the payment will increase. The interest will not change over the life of the loan if the homeowner chooses a fixed rate over a variable rate. Some plans have restrictions on how much can be drawn on an equity line of credit at one time. Lenders online can provide information on t
