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.

• How a Line of Credit Works

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.

• How Second Mortgages Work
• Definition of Mortgage

HELOC Costs

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

• Manage Your Mortgage's Closing Costs