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Anyone who is looking for a home, or currently owns one, should be familiar with the pros and cons of a home equity line of credit, commonly referred to as a HELOC.

A home equity line of credit is a loan where you, the borrower, offer the equity in your home as collateral to the lender. When you do this, you get the money you're borrowing disbursed over time, as opposed to all at once. Normal old-fashioned home equity loans give you your loan in a lump sum, which you pay off over time (along with interest, of course). With a HELOC, you will get something that's much more akin to a credit card, with a limit that you and the lender have agreed to.

HELOCs are defined by what's called a "draw period," which normally run from 5 to 25 years. A draw period refers to the period of time during which you can borrow from your line of credit. Like a credit card, a home equity line of credit can be borrowed against and then repaid, with interest, as often as you like, so that if you stay on top of your payments you could be at zero balance within a few months or years of taking your first amount.

One important thing to remember when contemplating a HELOC is that the interest rate is not fixed lenders will link it to such indices as the prime rate, so it will definitely change as time goes by. That's something to think about, especially when compared with an attractive fixed rate.

Additionally, because of the current economic crisis, many banks are scaling back on their HELOC offerings due to the plunging value of homes across the country remember, your home is the collateral offered to the lender in a HELOC, and if it changes the lenders will get nervous.

Before you make any sort of a decision on a HELOC or any other kind of major financial commitment, be sure to sit down with your financial advisor and go over the issues in as much detail as you can. When it comes to your money, these uncertain times require as much diligence and planning as possible.

There are significant risks associated with home equity lines of credit, which are commonly referred to as HELOCs. Many people have been unpleasantly surprised by their experiences, and still others are encountering problems using their HELOCs now that the economy is in trouble. If you're thinking about getting a HELOC you need to know as much about them as possible.

One major risk associated with a HELOC comes from the fact that they rise with the prime rate. So if the prime rate rises, you'll see a rise in your monthly payment. HELOCs also have no limit on the amount they can increase, with most having a limit of 18%. A standard mortgage or home equity loan, by contrast, can have fixed interest rates.

What makes HELOCs most tricky, is the lender's margin. This is something that they charge on top of the prime rate and they won't tell you about the margin unless you ask. Margins are determined by your credit history, how much debt you have on your house when you apply for the HELOC and other factors, and will vary from lender to lender. Many people have been surprised to see their monthly payments shoot up after the first few months of the initial introductory offer have expired.

Lenders are also required to offer a Truth In Lending summary, known as a TIL. In many cases, however, the TIL does not require the lender to disclose the margin and that can lead to unpleasant consequences.

If you're looking for a HELOC, be sure to sit down with a financial advisor or a trusted bank representative and discuss all aspects of the transaction in as much detail as possible. When it comes to your money and your home you can never have too much information.

When comparing the Annual Percentage Rate (APR) of a Home Equity Line of Credit (HELOC) and a standard loan, it is important to remember that they are essentially two different things. When it comes to a home equity line of credit , the APR will be the prime rate (or whichever major interest rate...

Many people make mistakes when applying for a home equity line of credit (HELOC) . The good news is that, as with just about everything in life, being forewarned is forearmed. Read on for some valuable tips on what not to do when applying for a HELOC.

One common mistake people make when applying...

The average homeowner will want to take a close look at what a HELOC can do for them. There are significant advantages to getting a home equity line of credit , as opposed to a traditional home equity loan , and the choice needs to be made carefully and thoroughly. You may find that a HELOC is...

If you're a homeowner and you're trying to choose between a traditional home equity loan and a HELOC (home equity line of credit) , then you need to be aware of their differences and similarities. They've got their pros and cons, of course, and these details could make a major difference in your...

Banks all over America are in the business of offering home equity lines of credit , more commonly known as HELOC . They've been used by millions of American home owners to get to the kind of credit line they need.

Some of the biggest names in the HELOC game are:

• Wells Fargo Home Mortgage
• ...

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Home equity loans are frozen when banks and other financial institutions in the business of lending money stop lending out more money to protect from losses they might face, due to either subprime mortgage or any other high-risk loans. When this happens it is very hard for borrowers to get any...

Interest is calculated on a Home Equity Line of Credit (HELOC) by using a major interest rate index, such as the prime rate, plus the lender's margin.

When you go shopping for a loan or line of credit , using your home as collateral, you might be tempted to get a HELOC, as opposed to a...