What is a HELOC?

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A home equity line of credit (HELOC) can be helpful when you are needing to borrow a lump sum to remodel your home, make a large purchase, or consolidate debt. Using your home equity as collateral, a HELOC is revolving credit. This open-ended loan can be charged up or paid down over the loan term. The interest rate fluctuates (typically every month).

Your lender will specify your credit limit (the maximum amount you can borrow) with the HELOC. In setting the credit limit, your pay-rate, outstanding debt, credit status and any other financial circumstances will be considered. You will be required to have an appraisal of your home to determine your home's up-to-date value. Your home's up-to-date value, subtracted from your remaining mortgage loan balance will help to determine your specific credit limit.