Have you been living in your current home for a long period of time and are in need of some extra cash? Well, if this is you then do not worry because there is a simple solution to this problem.
So, to help provide some insight, your local Dallas mortgage lender, The Betz Team with Guardian Mortgage, has listed how exactly you can obtain a home equity line of credit.
Home Equity Line Of Credit
A home equity line of credit is most referred to as a HELOC. This is an additional mortgage that is taken out on top of your existing Dallas mortgage. This type of loan taps in your home’s equity. You are able to accumulate equity the more you pay off your loan since equity is the difference between your home’s appraised value and your loan balance. Most lenders prefer that you have at least 20% equity in your home in order to apply for a HELOC loan. This means that you could borrow up to 80% of your home’s overall value and spend that money however you want.
To gain access to your home’s equity you either need to sell your home or take out a second mortgage. A HELOC is a second mortgage that is set up like a credit card, meaning you will have a certain amount that you have been approved for and can spend however much of that amount as you like. A major benefit to a HELOC is that if you do not spend the whole amount that you were approved for, you only have to pay back the amount that was withdrawn and you typically have a period of 5 to 30 years where you can withdraw this amount.
Your house is put up as collateral with a HELOC, which is the reason why you are offered such low-interest rates. To be approved, you will need to have good credit, a stable income, and be sure not to have too much debt. If you owe a lot on your current Dallas mortgage, you may have a hard time getting approved for a HELOC loan. So, be sure and pay off your first mortgage as much as possible before you apply.
For more information on how a home equity line of credit works or to get started on your application today, please contact your local Dallas mortgage lender, The Betz Team, at (469) 906-2522.