HELOCs

A Home Equity Line of Credit (HELOC) is a revolving credit line that allows homeowners to borrow against the equity in their home. Unlike a home equity loan, which provides a lump sum, a HELOC gives you access to a set credit limit that you can borrow from as needed, typically for a period of 5 to 10 years. The amount you can borrow is determined by the value of your home minus the balance on your first mortgage. HELOCs usually have a variable interest rate and offer flexibility, as you can withdraw and repay funds multiple times during the draw period. They are commonly used for home improvements, debt consolidation, or other large expenses, but since your home serves as collateral, failure to repay could result in foreclosure.