A Home Equity Line of Credit (HELOC) is a type of loan that allows homeowners to borrow against the equity in their home, using the property as collateral. Equity is the difference between the home’s current market value and the outstanding balance of any mortgages or liens on it. A HELOC functions as a revolving line of credit, similar to a credit card, where borrowers can draw funds as needed up to a predetermined limit, repay the borrowed amount, and borrow again during the draw period.
