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A home equity line of credit is a form of revolving credit. This means you can borrow an amount up to but not exceeding a pre-approved credit limit. A home equity line of credit is secured by the residual equity in your home. To calculate equity, subtract mortgage debt from your home value. Home equity lines allow a homeowner to make repairs or other home improvements, refinance other debt, or use for general purposes. Unlike a home equity loan, payments are flexible and may consist of interest-only payments. (Some states prohibit or restrict equity-based loans and lines of credit. )
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