Home Equity Line of Credit

Wednesday, August 1, 2012

Home Equity Line of Credit

A home equity line of credit, also known as a HELOC, is a type of loan that enables a Roseville home owner to take advantage of the equity in their home to acquire cash funds for other uses. Home equity lines of credit generally function as second mortgages. A second mortgage is a home loan that a home owner can receive if they apply for a secondary loan that is a higher amount and after their first mortgage. Most home equity loans grant a borrower up to 85% of the appraised value of their home and deducting the amount they still owe on their first mortgage.

A HELOC is very much like a revolving line of credit or credit card. There is a pre-established credit limit on the account. The borrower is not obligated to take money out on the account immediately. The funds may be used for any necessary purchases that would otherwise be unaffordable in Roseville. Home equity lines of credit can be in a first, second, and even subsequent lien status. When the borrower gets approved and signs the paperwork, they have three days to cancel the account in writing for any discretionary reason.