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