Array

How Do HELOC’s (Home Equity Lines of Credit) Work?

Must Read

Nikon D7000, Taming Bright Skies with Exposure Compensation

Balancing exposure in scenes that have a wide contrast in tonal ranges can be extremely challenging. The one thing...

Government Debt Consolidation Loans – Consolidate Your Federal Student Loan Debts

Are your debts becoming too much of a burden for you? Well, your country can help you deal with...

Debt Consolidation – Loan That Helps To Clear All Your Debt

When you are suffering from the burden of several debts, your first concern is to be debt free as...

Origin of Black Friday

Black Friday is one of the biggest shopping days of the year. Fresh from the Thanksgiving celebrations, shoppers throng...

Credit Card Consolidation – Why Debt Settlement Might Be A Cheaper Option

Credit card consolidation is a method which is used by many consumers today as a result of owning a...

Creative Ways to Finance Your College Education

College educations cost money, and depending on your school of choice, it can mean big money. Here's a quick...
Admin
test

A home equity line of credit, or HELOC, is a secondary mortgage loan set up as a line of credit that lets homeowners withdraw funds for a variety of purposes. These mortgage loans are used to fund sporadic needs such as debt reduction, home improvements, college expenses, etc.HELOC’s have a withdraw period, wherein the borrower can draw on the line, and a repayment period, in which the funds must be repaid. Standard withdrawal periods are five to ten years. On the other hand, repayment periods are extended – usually ten to twenty years. The distinction between the two periods is that borrowers are only obligated to pay interest in the withdrawal period, whereas the repayment period includes a payment of interest and principle. Home equity lines of credits vary, and some require repayment of the entire balance once the initial withdrawal period ends.How to Qualify for a Home Equity Line of CreditTo qualify for a HELOC, mortgage lenders look at the loan-to-value ratio. The majority of home equity lines of credit require a LTV less than 75%. In other words, if your mortgage balance is $115,000, and your home is worth $230,000, the loan-to-value is 50%, and you are eligible for the loan.What’s more, mortgage lenders have to ascertain that an applicant can pay back the withdrawal money. To meet the criteria for a home equity line of credit, the borrower’s debt-to-income ratio, which includes payment for the HELOC, must be less than 55%.Home Equity Line of Credit DisclosuresDisclosure statements contain important information about HELOC’s. Terms vary according to plan, and each borrower should set aside time and review disclosure contents. The home equity line of credit terms are subject to change. For example, the interest rate can increase. Additionally, the mortgage lender can terminate the line if the following occurs:1. If borrower defaults on repayment2. If borrower’s financial circumstances change3. If borrower falsified loan documents4. If the property’s value decreases

Latest News

Digital Marketing for Beginners

Digital marketing for starter, Let to basic learning about connecting with your audience in the right place at the...

What are 7 things poor people do that the rich don’t?

1. poor people watch TV in which people read books how many hours you spend in front of the TV and when was the...

Top 18 best small business ideas for beginners starting

A small business can be frightening and requires plenty of careful planning there are many small business ideas which can be beneficial as well...

Summer that makes you happy

We saw were already here I've been thinking about some of the things. I used to do with my husband even though he had...

4 Point to helpful tips specifically for caregivers

What you need to take a vacation. I know it sounds impossible creative and try to make it work for you almost everyone needs...

More Articles Like This