What Is A Home Equity Line Of Credit | Also Referred To As A HELOC

Hey guys you’re in for a treat today. On today’s episode of Monday’s with Mario I’ll be going over the topic, What is a home equity line of credit?

A home equity line of credit, or HELOC, is a second mortgage that gives you access to cash based on the value of your home. You can draw from a home equity line of credit and repay all or some of it monthly, somewhat like a credit card.
With a HELOC, you borrow against your equity, which is the home’s value minus the amount you owe on the primary mortgage. This means:

You have to have plenty of equity in your home in order to be eligible for a HELOC. Typically, a HELOC lets you borrow up to 85% of the home’s value minus the amount you owe on the loan.
Also — You could lose your home to foreclosure if you don’t make the payments because you’re using the home as collateral.

Reasons homeowners use their home equity line of credit are for major repairs or remodeling projects that increase the qvalue of your home. Here are my 2 favorite uses of a HELOC: 1- to use the Line of Credit to purchase rental properties and 2- To use the line of credit to pay down your mortgage, increasing your equity and expedite the amount of years you owe on your mortgage loan. -If you would like to learn more about these strategies — definitely give me a shout- Honestly these strategies will blow your mind as it did mine when I first learned about it.
Question, do you know the difference between a Line of Credit and an Amortization Schedule? If interested, we can discuss this topic on an upcoming show!

Thanks for tuning into today’s episode on Home Equity Lines of Credit. Did we discuss anything that you already didn’t know? If so, let me know by dropping your answer down in the comment section. Catch you guys on next weeks episode

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