Home Equity Line of Credit (HELOC)
A Home Equity Line of Credit is a loan that you can take from your bank, credit union or other lender. You can withdraw on the line of credit for a maximum amount of money and for a set period of time and then pay back the money to the lender. Once it is paid back, you can use it again if needed.
Frequently Asked Questions
What is a real estate line of credit?
A home equity line of credit (HELOC) is a type of loan where the lender agrees to lend you up to a certain amount. You use your house as collateral and this helps protect the lender in case that you don’t pay back the loan.
Can you buy property with a line of credit?
A home equity line of credit is an alternative to a traditional mortgage. It can be used instead of a mortgage when buying a house. This means that you are not required to pay off the principal on a fixed payment schedule, but you pay the interest.
Does opening a line of credit hurt your credit score?
When you apply for a line of credit, the lender will do a hard inquiry on your credit report and this might bring down your score by a few points for a temporary period of time depending on your overall credit quality and history. Also, if you borrow a large amount of money, this can increase your borrowing capacity and affect your credit scores.
