​A home equity line of credit (also referred to as a HELOC) is an open revolving form of credit that’s secured by the paid value of your home. Typically homeowners can open a HELOC with up to 85% of their home’s equity, or the difference between what’s currently owed on their home loan and the market value of it. Home equity lines of credit usually have better interest rates and more flexible repayment terms than any other loan type. Unlike traditional loans, funds are withdrawn as needed rather than being received in a lump sum (similar to a credit card).
It's also worth noting that you may have a "draw" period, during which time any available funds can be accessed, generally ranging from 5-10 years. Once that draw period has concluded, any withdrawn funds will need to be repaid, either immediately or within a set time frame. Most often, these funds are used to pay for home improvement projects, but they can be spent however you choose — a wedding, vacations, adoption, debt consolidation, and more.