What is a home equity line of credit?
A home equity line of credit, also known as a HELOC, is secured by your home and allows you to access the available equity you have in your home. With a HELOC, you can borrow as much or as little as you need, whenever you need it, up to a credit limit established at closing. As you repay your outstanding balance, the amount of available credit is replenished, which means you can borrow against it again, if needed, throughout your draw period.
Popular HELOC uses include making home improvements that might increase the value of your home and consolidating higher-interest rate debt on other loans (such as credit cards and auto loans).Footnote 1