Home Equity Line of Credit (HELOC)

A type of mortgage that allows a borrower to open up a line of credit using their home as collateral. The amount of the loan is based on the difference between the homeowner's equity and the home's current market value. When a borrower takes out a HELOC, the bank providing it will place a second mortgage loan on the home until the loan is paid off. Once the second mortgage loan is paid off, the borrower is able to use the loan to finance other purchases. < Prev   Next >