home equity

What is a home equity line of credit?

 

What is a home equity line of credit?

The Bankrate.com financial term of the day is: "home equity line of credit" or "HELOC."

No, a HELOC is not some kind of wrestling move. It stands for home equity line of credit, and you might think of it as something similar to a credit card account, and it's offered by your own home. Unlike a credit card, there's no plastic to carry around in your wallet, and the interest is usually deductible. But it is revolving debt, similar to a credit card, and you have a credit limit. In this case, it's based on your home equity, or the portion of your home's value that you own outright. You borrow against that.

A HELOC, or home equity line of credit, allows you to borrow from the money you have invested in your home.

To find a great rate on a home equity line, visit the Home Equity section at Bankrate.com.

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Too much debt, too few options

Dear Dr. Don, My husband and I have a $173,000 home equity line of credit, or HELOC, carrying an interest rate of 2.25 percent. It has a draw period coming to a close in March 2016. Our monthly payments are to jump at that... Read more

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