HELOC

"A home equity line of credit (often called HELOC and pronounced HEE-lock) is a loan in which the lender agrees to lend a maximum amount within an agreed period (called a term), where the collateral is the borrower's equity in his/her house...

HELOC loans became very popular in the United States in the early and mid 2000s, in part because interest paid was (and is) typically (depending on specific circumstances) deductible under federal and many state income tax laws. This effectively reduced the cost of borrowing funds and offered an attractive tax incentive over traditional methods of borrowing (such as credit card debt). Another reason for the popularity of HELOCs is their flexibility, both in terms of borrowing and repaying on a schedule determined by the borrower. Furthermore, HELOC loans' popularity growth may also stem from their having a better image than a "second mortgage" a term which can more directly imply an undesirable level of debt. Of course, within the lending industry itself, a HELOC is categorized as a second mortgage."

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