Home Equity Line of Credit

Last updated: September 28, 2017


HELOC stands for Home Equity Line of Credit. It is a line of credit based on the appraised value of the home minus the outstanding balance on the mortgage. For example:

Appraised Value of Home       $100,000
Percentage x 75%  
Percentage of Appraised Value       $75,000
Less the Balance Owed on Mortgage     -$40,000
Potential Line of Credit       $35,000
  • Lenders will evaluate your ability to repay by looking at your income, debts, other financial obligations, and credit history.
  • Lenders typically set a fixed period during which you can make withdrawals from the credit line. Some lenders may permit you to renew the credit line after this period. Some will require payment in full of the outstanding balance at the end of the period. Others may allow repayment over a fixed period.

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What to Look for in a HELOC

Costs of a HELOC