Resources - Home Equity Lines
Home Equity Lines of Credit (HELOC) have become a very popular method of financing and refinancing. Home Equity lines operate like their unsecured counterparts, however they are secured by the equity in the property. The rates on HELOCs are typically cheaper than unsecured lines and are prices based on Prime rate plus a premium (i.e. Prime + 0.50%). HELOCs are revolving credit and have interest only payments. Many lenders that offer HELOCs have an option to add fixed portions to the used portions to have a fixed rate and payment. 

Government requirements limit the maximum a HELOC can be to 65% Loan-to Value (LTV). Lenders that offer HELOCs also have more stringent requirements than for mortgages. Approval for HELOCs are typically calculated based on a 25 year amortization and are required to be qualified based on the government's benchmark rate (see the section on Qualifying Rates).