What is a home equity line of credit?
A home equity line of credit is a form of revolving credit in which your home is used as collateral. Home equity lines of credit feature a variable interest rate and a draw period.

What is a draw period?
The draw period is the time frame during which you are allowed to use the credit available on your home equity line. When you borrow funds from your line of credit it is referred to as a draw

How much can I borrow?
Your credit limit (also known as available equity) is determined by taking a percentage of your home's appraised or fair market value (to be determined when your application is received), and subtracting the balances of any outstanding mortgages on the property. If you qualify, the minimum home equity line is $20,000 and home equity fixed loan is $15,000

Must I occupy the residence I'm using as collateral?
You can use a residence that you do not occupy as collateral if the property's total existing mortgages and your requested home equity line add up to no more than 70% of an investment/rental property's appraised value and up to 80% is available for vacation homes

What can I use my funds for?
Once you close your Home Equity Loan / Line of Credit, the funds are yours to use as you wish

Does the appraiser have to come into my home to perform an appraisal?
In most cases, Home Equity Loans / Lines of Credit do not require a full appraisal. In fact for most loan amounts of $250,000 or less the appraisal process can be completed electronically

What is the difference between a home equity loan and a home equity line of credit?
While both are considered second mortgages, with a home equity loan all funds will be paid at closing. A home equity line of credit provides you with a credit line that you can borrow against at any time within a set time limit and up to a maximum amount

Does my home equity line of credit have any tax benefits?
In order to determine your tax benefits it is best to consult your tax advisor or attorney for specific tax guidelines. However, in most cases the interest on your home equity line of credit is deductible as long as your home equity debt is $100,000 or less and the total debt on your home is less than or equal to your home's appraised value. Any mortgage debt above your home's appraised value may not be tax deductible

What percentage of my home's appraised value can I borrow?
The amount that you can borrow varies based on a variety of factors. However, most borrowers can borrow at least 80% of their home's value (when all mortgages are totaled) and some can borrow up to 125%

How should I get started with the Home Equity Process?
We suggest you first start out by educating yourself using the Home Equity Kit. It will help you save thousands of dollars in the process and help you avoid many unnecessary traps.