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HELOC - Definition of HELOC


Definition: A HELOC is a Home Equity Line of Credit. The abbreviation is pronounced "he-lock".

Line of Credit

When you get a HELOC, you create a line of credit using your home as collateral.

HELOC as Second Mortgage

A HELOC is usually a second mortgage. Your home secures the loan, but your first mortgage (if any) will generally be paid off before the HELOC is if you default.


Like all loans, there's a cost to using a HELOC. You pay interest, and you'll have closing costs.

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