Home Equity Line Of Credit 101

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Home Equity Line Of Credit 101

Could a home equity line of credit get you the money you need?

If you’re a homeowner who’s frustrated that so much of your money is tied up in your home’s equity, you’re not alone. All too many people have faced the issue of needing liquid assets but discovering that the bulk of their net worth is wrapped up in their home’s value.

Does that mean you have to sell to access your home’s equity? No! A home equity line of credit could be just the solution for you if you need a line of credit but have your money tied up in your house.

What, exactly, is a home equity line of credit? Called HELOC for short, this is a revolving credit. That means that as you pay your debt off, the credit becomes available again. Your home serves as collateral for this credit line.

How much credit your lender will extend depends on the appraised value of your home, how much of your mortgage you’ve paid off, and your financial standing (e.g. assets, income, credit score). Your lender will set a maximum for that credit line, and will also set a term after which point you won’t be able to draw on that line of credit unless you renew. At the end of this term, you will generally need to have repaid the credit you withdrew on your HELOC.

HELOCs are a great way for you to access all of the money you’ve invested in your home to cover big ticket items like medical bills and education expenses.

Leveraging your house for a line of credit can get tricky, and you want to be careful that you don’t destroy your equity in your home. To have it handled by an expert team that has the finesse and experience necessary to make sure everything goes smoothly, visit Ranch & Coast Mortgage Group Inc. in Solana Beach, California. Home equity lines of credit are one of our specialties, and we’re here to help.