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HELOC - Definition of HELOC

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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.

HELOC Costs

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

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