A home equity line of credit (often called HELOC, pronounced Hee-lock) is a loan in which the lender agrees to lend a maximum amount within an agreed period (called a term), where the collateral is the borrower’s equity in his/her house (akin to a second mortgage)
Benefits and advantages of a home equity loan
- Fixed Rate. Home equity loans typically carry fixed interest rates that are often lower than credit cards or other unsecured consumer loans. …
- Lump Sum. The amount you borrow with a home equity loan is provided to you in one lump sum. …
- Tax Deduction.
