Home Equity Line Of Credit

Definition

Home Equity Line Of Credit (HELOC) A credit line on a house or other property, that can be drawn down and/or paid back by the borrower.

A revolving line of credit usually with an adjustable interest rate, which allows homeowners to borrow up to a certain amount over a period of time. HELOCs work in a manner similar to credit cards, where the homeowner can continuously borrow up to an approved limit while paying off the balance.

This is both a revolving line of credit and a mortgage, in that the collateral for the revolving line of credit in this case is some real estate, which is a defining fact for a mortgage. This form of product can either have an increase or decrease in principal, according to the actions of the borrower. These may also be used in the formation of asset pools for asset backed securities, though a specific named type of security has not been identified with these as underlying.

Disclaimer

This entry annotates a FIBO Ontology Class. FIBO is a trademark and the FIBO Ontology is copyright of the EDM Council, released under the MIT Open Source License. There is no guarantee that the content of this page will remain aligned with, or correctly interprets, the concepts covered by the FIBO ontology.