What does HELOC stand for? |
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Answer:
HELOC is an acronym for Home Equity Line of Credit. A HELOC is a line of credit. What's a line of credit you ask? A line of credit isn't a loan that is paid up front, it is a loan that is available for use at any time during the period. The lender assumes an amount of equity built into your home which is used as collateral. Terms for standard HELOCs are usually 5-20 years and interest rates differ from conventional mortgage loans in that they are variable similarly to an ARM. A HELOC is often used as an 80 - 20 mortgage where 80% of the loan value is accounted for with a conventional fixed mortgage and the remaining 20% is accounted for with a HELOC. Having a second mortgage in this fashion eliminates PMI or Private Mortgage Insurance. A HELOC is a great second mortgage and can be used to consolidate your debt or to use for home improvement projects. Borrow against your HELOC to finish or remodel a basement, build an addition, remodel your kitchen or do what you wish with it. Consider a HELOC for your second mortgage. Trackback(0)
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