A Home Equity Line of Credit (HELOC) What You Need to Know Before you Get One

What you need to know before you get a Home Equity Line of Credit (HELOC)

home equity line of credit (HELOC)

How I wish I knew then what I know now about a home equity line of credit (HELOC), also called Equity Line.

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If you are thinking about getting a Home Equity line of credit, “just in case”, read this and thank me later.  A word of warning: a Home Equity Line of Credit is not play money and it’s not a savings account.  It’s a potential debt.

The greatest advantage of a line of credit is that it usually has a much lower rate of interest than a credit card.  A line of credit is a useful product if you have a business – A business line of credit is a financial instrument typically used for an organization’s short-term working capital needs, such as inventory purchases, future project costs, or company payroll. Lines of credit are mainly to help even out the organization’s cash flow.

Then there is the personal line of credit, often called a HELOC or Home Equity Line of Credit.  This type of line of credit is secured by the equity in your house.  (This is the type I got, more of that later).  Another name for it could be “second mortgage”, but nobody at the bank ever uses that term. Continue reading “A Home Equity Line of Credit (HELOC) What You Need to Know Before you Get One”