What is Home Equity Line of Credit?
Thursday, January 17th, 2008Home Equity Line of Credit often called HELOC is a type of mortgage against free equity on your home. In this type of loan the borrower has the liberty to withdraw loan amount in parts or even draw checks until the loan limit is reached. This loan is highly popular because of this feature. Also, the borrower pays only the interest as the monthly installment based on the amount of loan utilized and not the entire approved loan. HELCO has a draw period of approximately 5-10 years, during which the borrower can withdraw the entire loan amount. The repayment of principal amount starts when the draw period ends according to the current rate of interest as HELCO is an adjustable rate mortgage. You can avail a repayment period of 10-20 years.