Home Equity Line of Credit (HELOC)
Home Equity Line of Credit (HELOC) is a type of loan that allows homeowners to borrow against the equity they’ve built in their home. It functions like a revolving line of credit, similar to a credit card, where the borrower can draw funds as needed up to a pre-approved limit. The equity in the home acts as collateral for the loan
Key features of a HELOC:
Variable interest rates: HELOCs often have adjustable interest rates that can fluctuate over time.
Draw period: During this phase, you can borrow from the line of credit and only pay interest on the amount used.
Repayment period: After the draw period, you must repay the borrowed amount, typically over a set period.
Homeowners often use HELOCs for renovations, debt consolidation, or other major expenses.
To see which lenders offer HELOC products, read our Lender Reviews.