Home Equity Line of Credit

A home equity line of credit is similar to the home equity loan, but instead of getting all the money at once, the borrower is essentially approved for a certain amount that they can withdraw in increments using a check book or debit card, up to the limit.

Funds designated for a home equity line of credit do not accrue interest until a purchase is made against the equity.

However, they frequently have variable interest rates, which means they can start out with manageable repayment options, but the amount due could rise, making it riskier depending on your monthly cash flow.

Posted in Refinance Glossary.