What is a HELOC?

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When you need to borrow some money to consolidate funds or purchase a big-ticket item, a home equity line of credit (HELOC) may be useful. Using the equity in your home as collateral, a HELOC is revolving credit. This is an open ended loan that can be paid down or charged up for the a set length of time, much like a credit card. The loan interest rate usually fluctuates monthly

The lender will determine your credit limit (the biggest amount you can borrow) with the HELOC. Your credit history, salary, debts and various other financial circumstances will determine your credit limit. So that the lender can ascertain your house's present market value, you are going to need an appraisal on your home. Your home's current value, subtracted from your remaining mortgage loan balance helps to set your specific credit limit.