What is a home equity line of credit (HELOC)?

A home equity line of credit (HELOC) is a type of loan available in North Carolina that allows homeowners to borrow money against the equity in their home. Equity is the difference between the value of the home and the amount still owed on the mortgage. A HELOC works similar to a credit card. Homeowners can draw money from the HELOC up to their approved credit limit. The money is typically used to pay for home improvement projects, pay for college tuition, or consolidate debt. The interest rate for a HELOC is usually lower than other types of loans, which make it an attractive option for those who need money quickly. HELOCs also offer flexibility in terms of repayment: homeowners can pay back only the interest, or they can make principal and interest payments. However, it is important to remember that a HELOC is a loan secured by the home, so if payments are not made on time, the lender has the right to foreclose on the property. Additionally, any cash taken out of the HELOC will reduce the amount of equity in the home, so homeowners should make sure they understand the risks and benefits before taking out a HELOC.

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What is a home equity line of credit (HELOC)?

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