A home equity line of credit (HELOC) is very different from a home equity loan. The HELOC is a line of revolving credit with an adjustable interest rate whereas a home equity loan is a one-time lump-sum loan, often with a fixed interest rate.
This is a revolving credit loan – also known as a home equity line of credit, where the borrower can choose when and how often to borrow against the equity in the property, with the lender setting an initial limit to the credit line based on criteria similar to those used for closed-end loans.
Like the closed-end loan, it may be possible to borrow up to 100% of the value of a home, less any liens. These lines of credit are available up to 30 years, usually at a variable interest rate. The minimum monthly payment can be as low as only the interest that is due.
Most home equity loans have fees attached, so check carefully what these are before you take one out.
Use our HELOC Calculator below: