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The Service Tree lists all services in "branched" groups, starting with the very general and moving to the very specific. Click on the name of any group name to see the sub-groups available within it. Click on a service code to see its details and the providers who offer that service.

Home Equity Lines of Credit

Taxonomy Code: TB-0700.2100-325

A line of credit, frequently referred to as a HELOC, that is extended to individuals who borrow against the value of their home using the home as collateral. The amount of these loans is usually the difference between the homeowner's equity in the home and the market value of the property. Most HELOCs have a draw period, during which the borrower can use the line, and a repayment period during which the amount borrowed must be repaid. Draw periods are typically 5-10 years, during which HELOC payments are limited to interest and may be made using HELOC funds. Repayment periods are usually 10 to 20 years, during which the borrower must make payments on the principal equal to the balance at the end of the draw period divided by the number of months in the repayment period. Some HELOCs, however, require that the entire balance be repaid at the end of the draw period (the HELOC reset date), so the borrower must refinance at that point. The major disadvantages of the HELOC are its exposure to a rise in interest rates as all HELOCs are adjustable rate mortgages, and the potential for a downturn in the housing market which negatively affects housing prices. Additionally, if a home equity line of credit is not repaid per the agreement, the lender may take possession of the house and sell it in order to pay for the credit line. This can occur even if the homeowner continues to make payments on his/her mortgage.

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