3 Things You Need to Know About Home Equity Line of Credit

Looking at the HELOC information on a smartphoneHELOC is an acronym for home equity line of credit. Homeowners who wish to have a revolving line of credit to cover large expenses can apply for this type of financial solution. This could include payments for other loans such as credit cards. HELOCs are often hot because they offer lower interest rates compared to other types of loans. If you are looking for a home equity line of credit in Ogden, here are three things you need to know, according to Wasatch Peaks Credit Union.

How Does HELOC Work?

Think of HELOC as a rotating line of credit. Compared with other home loans, you can borrow as big or as little as you need. This is instead of just getting a lump sum of money at one given time. Remember, though, that the amount of money you can borrow at any given time is still dependent on your maximum credit limit.

How Do I Pay If I Get Approved for HELOC?

When you’ve approved for a HELOC, there are basically two periods. The first period is your “draw period.” This is when you can use the credit line actively, which means when you can borrow the money you need. The other period is the repayment period. This is when you need to pay back the amount of money borrowed previously.

How Do I Become Eligible for a HELOC?

First, you need to ensure that the equity in your home is readily available. This means that the amount you plan to borrow through HELOC is less than the total value of your property. Normally, homeowners can borrow up to 85 percent of the home value less the amount of money owed. As for the application requirements, they’re quite basic. The lending company will do a background check. They will look into your monthly income, existing debts, credit history, and score, as well as your employment history.

If you think that a revolving credit line is suitable for your needs, apply for a HELOC today. Do your research to ensure that you are eligible, and keep this information in mind when you apply for one.

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