Saving, Managing Debt, and Budgeting

Home Equity

What is a “home equity line of credit” (HELOC)?

A home equity line of credit is similar to a home equity loan, except the lender gives you the opportunity to use all or part of the credit over a certain period of time. Lenders may offer initial low interest rates, and may attach conditions as to when the credit line is to be paid back or closed, so it is important to understand the fine print on a HELOC. The interest rate may also be fixed or variable, depending on the terms established by the lender, allowing a homeowner to access as much of the credit as he requires.



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