A home equity line of credit is a form of revolving credit.
A specific amount of credit is set by taking a percentage of the appraised value of the home and subtracting the balance owed on the existing mortgage. Income, debts, other financial obligations, and credit history are also factors in determining the
credit line. Some lenders will charge membership or maintenance and transaction fees every time you draw on the line. Interest is usually variable rather than fixed.
Once approved, you have the flexibility to tap funds whenever you need
them, so whether you tackle a full-blown remodel — or just do a few upgrades — you’ll have the funds on hand.
- Those who need varying amounts of funds for different purposes at different times
- Those who need to have quick access to their home equity at a later time
Advantages of a home equity line of credit:
- You can take out small sums periodically, as opposed to one lump sum
- Interest will only be charged when you deduct the money
- Zero closing costs2
- No annual servicing fee
Lines are available for up to $350,0003 depending on your credit and your home’s value. Tapping your line of credit is as easy as writing Equity Checks, using your HELOC debit card for purchases, or transferring funds from your
line of credit to another account.