HELOC stands for home equity line of credit, and is a type of loan that you can receive based on how much equity that you have paid in to your home. It is basically a second mortgage on your home. This type of loan has an interest rate that floats, so that means it can go up or down each month. Heloc loans can help you to pay your bills if you are laid off work and are good to have for an emergency fund if you have no other way of building one. If you are looking for a way to get money to pay expenses (like getting that new Kinect system and the Kinect games that go with it for the kids this Christmas) and cannot get approved for any other type of loan a heloc home loan may be just what you need.

The amount of money that will be available to you through a heloc mortgage loan will be based on how much you have already paid on your mortgage. In other words, the amount of equity you currently have in the home. For example, if you have a $300,000 home and you still owe $250,000 on your home you will have $50,000 in equity that will serve as collateral on your new heloc loan. You do not have to borrow the whole amount that you have available, but the amount available is the maximum that you will be able to borrow.

You want to keep in mind that if you stop paying your heloc loans you will have your house foreclosed on and sold. This is done so that the institution making the loan to you can recover the money that was borrowed. It is the same as if you had stopped making your mortgage payment.

In order to qualify for a heloc loan you will need to show proof that you have the amount of income necessary to repay the amount that you owe. This means that if you are thinking of opening a line of credit to use for emergencies you will want to do it while you still have a job. Getting any type of loan is extremely difficult without proof of employment and monthly income, so keep this in mind.

Heloc loan rates will vary because they are floating. Because this type of loan is secured by your home the lender that you choose is taking a lot less risk than they would be if you were taking out a personal loan or opening a credit card account. You are putting your home up as collateral so the bank knows you have a good incentive to pay the heloc loan payment. This means that the interest rate you will get will be a lot lower so that you will be able to repay the amount you owe a lot faster. The initial interest rate that you will receive will depend on your credit rating so you may want to be sure that your credit report looks good to take advantage of a lower rate.

Heloc loans usually come with a checkbook and a debit card so that you will have your credit available to you whenever you need it. You will be allowed to spend the maximum amount that you are approved for, and you will receive a statement in the mail each month for the money spent plus interest. You will see a minimum payment amount and a total balance of how much you owe. This way if you are not able to pay your balance in full you can make the minimum payment and stay in good standing on your heloc loan. However, as a rule, you want to make the normal monthly payment if you can because the minimum monthly payment will generally keep you roughly even in the principal you owe. In other words, with the minimum payment you are really just paying the interest on your heloc loan.

To get the best heloc home loan you will want to pay a visit to the place where you have your mortgage. You have already established a relationship with them and they have all of your financial transactions at their fingertips. You may also be able to get a better rate since you are already a customer at that financial institution. If you would rather explore other options you will still be able to find institutions that offer heloc loans and offer great rates. If you want to make sure that your bank or credit union is giving you the best rate on your loan, shop around at different financial institutions and get several quotes. Then, take these quotes to your bank and make sure they can at least match any heloc loan rate quote you have gotten and hopefully beat your best quote.

In order to make sure that you are getting the best heloc loan for your situation you may want to get a few things in order. First, look through your statements from your mortgage payments and figure out how much equity you have built up in your home. Remember, this is the price of the home minus the money you still owe. You can look at websites like Zillow.com and get an idea what your home is currently worth in the existing home market. This will give you a rough idea how much equity you have in the house. The bank or credit union you are getting your loan through will have a professional appraisal done on your house, but this will give you a ballpark idea. Next, be sure that your credit is in good shape so that you can take advantage of the lowest rate possible. Lastly, be clear on the purpose of taking out a heloc loan so that you spend your money wisely.

Heloc home loans are a great option for homeowners who need to get their hands on some cash fast. You can use them to pay off any unsecured debts or for any other need you may have. If you have a clear purpose for needing to take out a heloc loan and stay focused on that purpose you will not find yourself wasting the money that you have paid in to your house on things that will put you in debt. You do not want to risk losing your home over things that you do not need. If you want to be able to pay your expenses a heloc home loan may be your best option.