What Is A Home Equity Line Of Credit And How Does It Work

A home equity line of credit or heloc is a second mortgage that gives you access to cash based on the value of your home.

What is a home equity line of credit and how does it work.

Unlike the continuous line of credit that comes with a heloc home equity loans work in much the same way as your first mortgage. Before you apply for a heloc see our home equity rates check your eligibility and use our heloc calculator plus other heloc tools. You can draw from a home equity line of credit and repay all or some of. A home equity line of credit also known as a heloc is a line of credit secured by your home that gives you a revolving credit line to use for large expenses or to consolidate higher interest rate debt on other loans footnote 1 such as credit cards.

As collateral your home is what is used as security for the loan. Home equity lines of credit come with various terms and many allow you to use the line for years without repaying principal. To start the funds from a home equity loan are disbursed in one. A heloc often has a lower interest rate than some other common types of loans and the interest may be tax deductible.