HOME EQUITY LINE OF CREDIT
A home equity line of credit (HELOC) is a type of loan that allows homeowners to borrow money using the equity in their home as collateral. Unlike traditional loans, a HELOC is a revolving line of credit, similar to a credit card, that can be drawn upon as needed. The borrower can choose when and how much to borrow up to a specific credit limit determined by the lender.
One of the benefits of a HELOC is that it can provide homeowners with flexible access to funds for various purposes, such as home improvements, debt consolidation, or unexpected expenses. The interest rates on HELOCs may also be lower than other forms of credit, making them a cost-effective option for some borrowers.
By using a HELOC responsibly, homeowners can leverage the equity in their homes to achieve their financial goals while maintaining their homeownership.