HELOC, defined as Home Equity Line of Credit is a loan in which the lender agrees to lend a maximum amount within an agreed period (called a term), where the collateral is the borrower's equity in his/her house (akin to a second mortgage).
When you take out a HELOC loan to lower your debt payments, it could save you money on interest and lower your monthly payments. HELOCs often have lower interest rates than mortgage payments. When approved for a HELOC, you could choose to pay off your mortgage right away and then make payments to your HELOC instead.
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