Home Equity Line of Credit

A HELOC provides homeowners with equity a low-interest revolving line of credit. This can be a powerful financial tool.

A home equity line of credit is a type of second mortgage that provides you with direct access to a cash pool. Usually, this rounds up to about 85% of the total value of your home, minus what is remaining due on your first mortgage.


Home Worth

This line of credit is typically easy to obtain due to the fact that it is secured by your home.

It provides you with a low-interest rate line of credit that is considered to be “revolving” that may be used to cover a large expense or to consolidate debt that has higher interest rates, such as other loans or credit card balances.

In addition to having lower interest rates than other types of loans, you may qualify for a deductible on the interest that is paid.

How Does the Home Equity Line of Credit Work?

When you take out the home equity line of credit, you are – essentially – borrowing against the amount of equity that you have placed into your home. The home is used as the collateral for that credit. As you borrow, you may back on the outstanding balance. When you make a payment, the credit on the HELOC is replaced.

This is similar to available balances on credit cards when you make payments on those. It is open for a draw period, or a set amount of time. In most instances, this is about 10 years, or until you reach the credit limit. At the end of that set of time, a repayment period starts. This, on average, is usually for a 20-year period. During the draw time, you may borrow against the home equity line of credit as much or as little as needed.

Do I Qualify for a Home Equity Line of Credit?

In order to qualify for the home equity line of credit, you will need to have set equity in your home. This means that the amount that is left owed on your home should be less than the overall value of your home.

Your credit score, your credit history, your history of employment, the amount of money that you make each month, and the outstanding debts that you currently owe will all be evaluated to determine if you are an ideal candidate for a home equity line of credit.

Interest Rate Options

In most instances, a home equity line of credit will have a variable interest rate. That means the amount of interest that you pay may – potentially – change from one month to the next month, but, it may remain about the same. The amount of interest rate that is charged will be calculated using a margin and an index. In most cases, the U.S Prime Rate is the standard. In some instances, you may be able to have a fixed interest rate.

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If you have a desire to learn more about agriculture land loans and want to start the application process, you may visit us at one of our 8 locations. These include our Ohio Locations: North Eaton, South Eaton, Somerville, Camden, Oxford, Hamilton, New Lebanon, and the Mortgage Center in Richmond Indiana.

For more information, simply contact one of our friendly lenders and we will be more than happy to assist you.