What is a Home Equity Line of Credit?

A home equity line of credit, or HELOC, let’s homeowners borrow money against the equity they have built up in their homes. Like other kinds of home equity funding, a HELOC is based on the value of your home compared to how much you still owe on your mortgage.

A HELOC is different than a home equity loan because it is a line of credit. A line of credit, a HELOC doesn’t have a set borrowed amount. Instead, it has a limit that you can borrow up to, similar to a credit card.

Some reasons people take out HELOCs include:

• Renovations or remodeling on a home

• An unexpected expense

• Repair jobs

How Does a Home Equity Line of Credit Work?

A HELOC works very similarly to a credit card in that you can borrow up to a set limit and you repay what you owe plus interest. Unlike a credit card, a HELOC is a secured line of credit, backed by your home. This means rates on HELOCs are typically lower than unsecured loans, like credit cards.

About your HELOC

• Can borrow up to 80% of the value of the home

• Low, variable interest rate, based on prime plus points depending on your credit score.

• No prepayment penalties

• Open ended line of credit

Questions? Give us a call at 570.826.8244 or contact us here.

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