Introduction
The term line home or better known as home equity line of credit refers to the maximum amount of money that a lender agrees to lend in a given period of time. In this agreement, the borrower’s equity in his or her property will serve as the collateral for the loan. The home has always been the most valuable property of anyone. This is the sole reason why people use it as their fall-back when they want to apply for major leases like car, education and medical bills. A line home equity loan is not to be misused as this will lead to mortgage delinquencies and foreclosures.
History
The maximum value of a line home loan is around 80 percent of the total cost of the collateral. Of course, the financial situation of the borrower will also be assessed by the lender. Major loans such as this usually takes 20 years or more to pay and is subjected to the borrower’s retirement age. Lending companies allow more than one person to apply for the line home loan as well. These borrowers are often referred to as co-applicants. Various companies have different rules for their lending process. That is why borrowers have to make sure that they discuss everything with the lender first before making any decisions.
Features
When a person wants to apply for a line home loan, he or she should check his or her credit report first. The standing of one’s credit report has a big influence on this person’s chance of qualifying. This will also help determine the interest rate that he or she will be subjected to. A free copy of anyone’s credit report can easily be acquired from the Credit Bureau. Applying for any kind of loan always means an additional monthly expense. That’s why borrowers should make it a point to lighten, if not free, their financial obligations before they apply for a line home loan. It would be wise if they consult a mortgage originator about the matter too. After all, these professionals are the experts when it comes to dealing with bank proclivity and quiddity. One other advantage of working with a mortgage originator is that he or she can apply for the borrower’s pre-approval certificate. This certificate is important for any kind of loan as it will serve as proof that the bank is indeed going to finance the purchase. Lastly, customers should always anticipate that there are taxes and pay rates that comes with these loans. It makes a wise move to leave a leeway for unexpected expenses like an increase in one’s life insurance cover or hospital bills. Financial advisors always say that people should save for the rainy days, live within their means and bite off only what they can chew. Being tied up to a line home loan is a very serious matter – it’s a 20-year commitment.
Tips and comments
5 tips for line home loans:
1. Keep their credit reports clean.
2. Free oneself from financial baggage.
3. Consult the expert.
4. Get a pre-approval certificate.
5. Live within one’s means.
