Home equity lines of credit, or HELOCs, are a popular way of using the equity in your home for debt consolidation, higher education expenses, vacations, or home improvements. A HELOC works much the same as a credit card with a line of credit established at the start of the loan. These types of loans allow for advances up to the credit limit for a given period. Payments are due during this “draw” period and when that period time expires, the remaining balance is paid over a period of usually 15 years.
HELOCs usually have a variable interest rate meaning the interest rate AND payments may go up or down during the life of the loan.