Home Equity Line of Credit (HELOC)

Home equity loans have been helping homeowners for years as a way of cheap financing for other expenses. A HELOC (Home Equity Line of Credit) can be used for home repairs, improvements, or can be used to pay off other debts and bills. It also comes in handy as a source of emergency credit in a bad situation.

Nowadays though, HELOC loans are hurting homeowners all over the country. The bad housing market, has led to a severe drop in home values, and a rise in the amount of delinquent mortgages. As a result, many mortgage lenders and banks have severely limited, or in some cases, halted, approval of home equity lines of credit. With most HELOC loans being denied, many homeowners are facing problems now that they do not have a huge loan, backed by their home, to fall back on. This is further ruining a lot of homeowners financial position, and halting progress in the housing market.

Home Line Of Redit

While mortgage lenders and banks have primarily targeted homes and locations which have suffered the most in terms of dropping home values, these are often where the most struggling homeowners live.

Are you concerned about not being able to get a HELOC? Do you know if your considered to risky for a mortgage lender?

Just a few years ago, mortgage lenders and banks were approving home equity lines of credit for nearly everyone. The housing market was booming, and it seemed to be a low risk, high reward investment. Nowadays though, lenders and banks are struggling themselves, and are desperately trying to scale back the amount of HELOC approvals. When a lender or bank has to foreclose on a home which has an outstanding HELOC loan, there is a good potential for a loss of money. By reducing, or in many cases, stopping all home equity loans, the risks are minimized for the lender and banks. This way, banks can provide a little more assurance that a homeowner will not be able to afford their home loan due to a loan, and lose it to foreclosure. On top of all of this, mortgage lenders and banks typically do not make much profit on a HELOC loan to begin with.

While getting a home equity line of credit is not impossible, it is much harder to do right now. The housing market is bad, and homeowners are struggling. Until this changes, getting a HELOC will remain a difficult, but not impossible, process.

Home Equity Line of Credit (HELOC)

Virginia Home Equity Line of Credit (HELOC) Loans

If you're shopping around for new credit and you own a home, a home equity line of credit, or HELOC, is an option. Using the equity in your home, you can qualify for a large amount of credit at a fairly low interest rate.

A home equity line of credit is a revolving credit account that uses your home as collateral. Depending on the amount of equity you have in your home, it's possible to obtain a large credit limit, much larger than most credit cards allow.

Home Line Of Redit

With most HELOCs, your credit limit is calculated by using a percentage of the home's value and subtracting the balance of the mortgage. So, your HELOC limit might not equal the full amount of equity you have in your home. Even so, it's possible to have a credit limit of ,000 or more, depending on your home's equity.

The application process and fees associated with an HELOC are very similar to those of a mortgage. As such, it's common for initial fees to total several hundreds of dollars. So, when you're choosing a HELOC it's important that you shop around for the best terms, the same way you'd shop around for a mortgage. Because interest rate and fees vary from one lender to the next, getting a few loan quotes is important to minimize your cost in terms of interest rate and fees.

Shopping around for an HELOC by getting free loan quotes is a more effective way of finding a loan than simply choosing a lender through other arbitrary means. When you compare loan quotes from several different lenders, it's likely that you'll find lower interest rate and fees with a lender that you didn't first consider.

Get free loan quotes for different lenders before you make an application for a home equity line of credit.

Virginia Home Equity Line of Credit (HELOC) Loans