What is a Home Equity Line of Credit? The equity of a home is the difference of the home’s actual value and how much the homeowner owes on the mortgage. A Home Equity Line of Credit (HELOC) acts like a second mortgage and people can use the loan proceeds for a variety of different needs. This is a normal line of credit that is similar to a credit card, where you can borrow money as needed up to a certain limit. Most of the time, the loan proceeds are used for major expenses, like home improvement, debt consolidation, and education. However, it is important to remember that the lender can foreclose on the home if the loan is not paid back, since the collateral for a HELOC loan is the home.
I have a HELOC and it has come in handy for me in doing home improvements. My wife and I have taken the opportunity to do remodeling on our house over the years, always using the HELOC. We love the flexibility that it affords. When we decide to make changes, it is always there, saving us time during the process and pains of getting a new real estate loan. If this sounds like something that would be useful to you, please give our specialists at Wasatch Peaks a call so we can “exceed your expectations.”
C. Blake Burrell