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equity line of credit (HELOC)
A mortgage set up as a line of credit against which a borrower
can draw up to a maximum amount, as opposed to a loan for a fixed
dollar amount. For example, using a standard mortgage you might
borrow $150,000, which would be paid out in its entirety at closing.
Using a HELOC instead, you receive the lender’s
promise to advance you up to $150,000, in an amount and at a time of your choosing.
You can draw on the line by writing a check, using a special credit card, or
in other ways.
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