<P> 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 ) . Because a home often is a consumer 's most valuable asset , many homeowners use home equity credit lines only for major items , such as education , home improvements , or medical bills , and choose not to use them for day - to - day expenses . HELOC abuse is often cited as one cause of the subprime mortgage crisis . </P>
<P> 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 ) . Because a home often is a consumer 's most valuable asset , many homeowners use home equity credit lines only for major items , such as education , home improvements , or medical bills , and choose not to use them for day - to - day expenses . HELOC abuse is often cited as one cause of the subprime mortgage crisis . </P>
home equity line of credit what is it
home equity line of credit what is it
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
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