How to Get a Home Equity Line of Credit

Contributor

By eHow Contributing Writer

Article Rating:

(4 Ratings)

A home equity line of credit is like a special checking account that taps into the equity in your home, allowing you to make improvements, pay for education, buy a car or whatever you want. And the best thing is, the interest is tax deductible!

About Home Equity Line of Credit Loans
When a home is worth more than the amount of the mortgage on it, the excess value is called equity. If a … More
How to File for an Equity Line of Credit
An equity line of credit is basically a second mortgage on your home.… More
How to Compare Home Equity Credit Lines
One of the perks of owning a home is building equity. Equity exists when a home owner owes less money on t… More
Pros & Cons of Home Equity Lines of Credit
Home equity lines of credit are a way for home owners to use some of the money they have already used to p… More
About Home Equity Interest Rates
Interest rates in home equity vary depending on a person's credit and a home equity line of credit, or HEL… More
How to Get a Home Equity Line of Credit
A home equity line of credit is like a special checking account that taps into the equity in your home, al… More
How to Obtain Funds With a Home Equity Line of Credit
Obtain funds with a home equity line of credit by getting a checkbook from the bank to write checks from t… More
When to Refinance Your Home Equity Line of Credit
Usually when a person refinances an equity line of credit, they combine it with a new first mortgage refin… More
Difference Between a Home Equity Loan & a HELOC
A home equity loan is generally a fixed rate loan, while the HELOC, or Home Equity Line of Credit, is like… More
How to Pay Down Principal on a Home Equity Line of Credit
A home equity line of credit is a loan taken against the value of your home. It depends on the equity you … More

Difficulty: Moderately Easy

Instructions

Things You'll Need:

Real Estate Brokers
Online Mortgage/finance Services

Step 1

Contact your banking institution. If you are already doing business with this organization, it might be more willing to keep you as a customer.
Step 2

Contact local banks or savings institutions, which are more likely to do these types of loans.
Step 3

Contact a local real estate mortgage broker for references of lenders who offer credit lines.
Step 4

Look for the credit line with the lowest interest rate.
Step 5

Compare terms. Most credit lines have a "draw period" (the period during which you can write checks and tap into your equity) of 10 years, and an additional repayment period of five years, for a total of 15 years.
Step 6

Provide the documentation required by the lender. If the lender is a local bank or savings institution - rather than a mortgage lender - the time, fees and documentation required to complete the transaction may be significantly reduced.

Tips & Warnings

Typical lines of credit require a minimum monthly payment of 1 percent of the used portion of the loan.
If you don't use the money in your credit line, you don't pay on it. You only pay interest when you actually use the money.
A line of credit is secured by your home. Failure to repay could result in foreclosure and losing your home.
Protect your checks! The checks that the lender provides you draw money directly from your equity.

Comments

bsherrod said

Flag This Comment

on 8/2/2009 Great Article, I think that in todays economic environment people need more aggressive opportunities to become homeowners. I was able to get a loan through a private source that few people are aware of. I had some serious credit problems at the time, but was still able to borrow the money that I needed to buy a home. I went to http://budurl.com/notapaydayloan and I got the information that I needed to borrow the money.