William Telish

William Telish and his team are often approached about home equity lines of credit. What are they, and how can homeowners put them to good use? What can you get with a home equity line of credit?

What Is a Home Equity Line of Credit?

A home equity line of credit is a credit line that is established and secured by the borrower's equity in his or her home. Equity is the amount of money that the house is worth minus the amount owed in all combined mortgages. For example, if you own a home worth $300,000 and you have a total of $250,000 in mortgages between first and subsequent mortgages, you would have $50,000 in equity in your home.

A home equity line of credit taps into the existing equity the borrower has in his or her home in order to offer them a flexible way to withdraw money without taking out a second or third mortgage. Many lenders are willing to make home equity lines of credit available because they believe it is much less likely that the borrower will default when his or her home is on the line. Theoretically, the lender could foreclose if the line of credit is not paid for, but the first and any subsequent mortgages would have to be paid first.

What Can I Do With A Home Equity Line of Credit?

Most home equity lines of credit have few restrictions on spending, although some specific that the funds must be earmarked for certain uses. In most cases, the borrower receives either checks or a credit card that can be used to make home improvements, pay for college, pay medical bills or pay other expenses. In some cases, the lender does not even look at the spending; in other cases, the lender demands a copy of the receipt or payment proof for certain things, particularly if the money is used for education or to purchase a secured item like an automobile.

Borrowers must be very careful when using home equity lines of credit. These lines of credit are not designed for frivolous spending; doing so can put the borrower's home at risk. Instead, they are designed to give borrowers affordable options in financing purchases or expenses that might otherwise be difficult for them, such as college tuition or unexpectedly high medical bills. Borrowers who treat home equity lines of credit like a credit card are sometimes faced with the unpleasant reality of being unable to pay back their mortgages and their HELOC payments; some are even forced to file for bankruptcy.

When it comes to taking out a HELOC, it is important to have sound mortgage advice from an expert who understands the industry. See William Telish and the team for the latest on mortgages, second mortgages, creative financing and home equity lines of credit. They will work to help you find the right solutions to your needs.

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