What does the acronym HELOC stand for?

The acronym HELOC stands for Home Equity Line of Credit. This financial product allows homeowners to borrow against the equity they have built in their property. The equity is the difference between the current market value of the home and the outstanding mortgage balance.

A HELOC functions similarly to a credit card in that it provides a revolving line of credit, allowing borrowers to take out funds as needed, up to a predetermined limit based on their equity. This can be particularly beneficial for individuals who need access to flexible funding for home improvements, education expenses, or other financial needs without going through a lengthy loan application process each time.

In contrast, the other options do not accurately represent the term. "Home Equity Loan of Credit" suggests a singular loan rather than a revolving line of credit, "High Equity Loan of Credit" introduces an ambiguous term that does not conform to standard industry terminology, and "Housing Equity Line of Credit" incorrectly modifies the term “Home” with “Housing,” which is not the traditional phrasing used in finance for this product.