HOME EQUITY LINE OF CREDIT (HELOC) ⁶

HOW IT WORKS

A home equity line of credit, also known as a HELOC, is a line of credit secured by your home that gives you a revolving credit line to use for large expenses.

PROS

• Instant access to funds
• Interest rates are often lower than revolving accounts

CONS

• Your home is at risk. If you use the money from your HELOC and cannot afford to pay it back, you could be in danger of losing your home.
• Unpredictable payments. Variable interest rates mean that if interest rates increase, so will your payment.
• Fees & Penalties. HELOCS can come with annual fees, prepayment penalties, cancellations and inactivity fees.
• You risk not having available equity for a major life event (such as a death or job loss).