How to get a home equity line of credit
A home equity line of credit (HELOC) is a great way to get access to cash, especially when you’re planning for major ongoing expenses, want to consolidate other debts or in the case of emergencies. You can apply for a HELOC by phone, online or in person. When you’re ready to apply, your lender will likely want to discuss the following:
- How much equity do you have in your home?
- Will you be applying by yourself or with a co-applicant?
- Do you live in the property that will be used as collateral?
Let’s take a closer look at some of these items.
Your home’s equity
The amount of equity you have in your home is determined by the value of your home minus the amount you owe on your mortgage. For example, if your home is valued at $300,000 and you have a $150,000 balance on your mortgage, you have $150,000 in equity.
Information you’ll need to apply for a HELOC
You’ll want to have an idea of your home’s value, as well as documents showing your household income, Social Security number and any other outstanding balances. Lenders also will ask for a mortgage statement, a property tax bill and a copy of your homeowner’s insurance policy. There may be more documentation needed based on your situation as the application progresses.