Home Equity

home equity line of credit (HELOC)

A real estate loan, usually in a subordinate position, that allows a borrower to borrow against equity in real estate owned (usually a primary residence or second/vacation home) with specific limitations. This is an open-end loan that permits the borrower to repay and re-borrow the funds available.

home equity loan

A mortgage on the borrower's principal residence (or second/vacation home) usually for the purpose of making home improvements or non-housing expenditures such as debt consolidation or tuition. This is a closed-end loan repayable in accordance with a fixed schedule.