Home Equity Line of Credit

Definition

A HELOC—a credit line backed by your home's equity that you can borrow from—basically, a second mortgage waiting to happen.

Example Usage

We opened a HELOC for $50,000 to fund the kitchen renovation.

Origin

Financial product developed in the 1980s as home equity products proliferated

Fun Fact

HELOCs often have variable interest rates tied to prime, so your rate can spike if you need money during a financial crisis

Source: Mortgage and finance terminology

Related Terms

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change order

A formal document modifying the original contract, usually adding more work, more time, or more money—often all three. It's how contractors politely inform you that your 'simple request' will cost an additional $5,000. Change orders are proof that nothing is ever as simple as the original estimate suggested.

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waterbed

A bed filled with water instead of traditional springs or foam, heated by an electric thermostat, and marketed in the 1960s-1980s as a revolutionary comfort innovation and status symbol. Waterbeds required special maintenance and were prone to leaks and motion sickness in some users.

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Listing Agent

The seller's personal hype person whose job is to make a perfectly average house sound like a French chateau. They are professional poets who can make a closet-sized bathroom sound like a spa retreat.

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assess

The formal process of determining value, typically involving clipboards, spreadsheets, and someone walking around your property looking concerned. In real estate, it's how governments decide how much they can tax you; in business, it's how managers justify their existence by evaluating everything constantly. The corporate cousin of "let me take a look at that."

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Pre-Approval

A letter from a bank saying they'll probably lend you money, assuming nothing in your life changes between now and closing. It's a financial pinky promise that expires faster than milk.

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comparable sales

Recently sold properties similar to yours that allegedly determine your home's value, though somehow the appraiser always picks the worst examples when you're selling and the best when you're buying. It's objective data filtered through suspiciously convenient selection.

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