Home Equity Line of Credit (HELOC)

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A Home Equity Line of Credit (HELOC) is a revolving line of credit secured against the borrower’s home. These are the current best HELOC rates.

The owner can borrow any amount up to the lender’s approved limit, and pay interest only on the amount used. By regulation, the maximum loan-to-value on the revolving portion of a HELOC is 65%. However, most lenders allow the borrower to add another 15% in the form of an amortizing mortgage, for a total loan-to-value of 80%.

If a borrower makes interest-only payments on a HELOC, the amortization is effectively infinite. In other words, it would never be paid off unless principal payments were made also.

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