This is a very popular loan. This a special type of Line of Credit secured by the equity of your property. Usually while we pay our mortgage principle down we create an equity on the property. While we draw on that equity in the form of a loan then the loan is secured by that equity. This is called Home Equity Line of Credit.

Normally the mortgages which allows HELOC are of readvancable type. Which means that the lender promises you to pay a fixed amount of sum on demand. Say you have a mortgage of $50,000.00. Under normall terms you have to pay that off after the contract term. In readvancable mortgage - Say after an year you have paid down $3000.00 off principle. Then you can draw $3000.00 from that mortgage to your LOC.

• Money can be easily withdrawn
• Dwarn on money must be paid within the repayment time given in the contract
• Daily variable rate interest
• Interest on HELOC is not the same as in the mortgage
• Low cost easy access
• Tied to home value. In case home prices go down then the fund would dry up