Home Equity Lines of Credit

Video Transcript

"This is financial adviser Patrick Munro talking about what is a home equity line of credit, or a HELOC, for short. Our home is our biggest value in America today, and it's our biggest asset, as well. It's our biggest responsibility, too. When we originally bought the home, we had to put down a down payment. Well that down payment, as a difference of the overall purchase price, became our first bit of ownership, or equity. As time goes by and you pay your mortgage down on a regular basis, hopefully property values are rising, as well. The difference between those two, the middle ground if you will, is your equity. And this is what home equity lines of credit were designed around. Because as that equity position grows, you're able to harvest that money out. The banks like that secondary line of business. And of course, it drives the economy, going forward. That's all well and fine except for the fact that when home values go down in value, banks get tighter in their lending practices, and it becomes more and more difficult, going forward. So make sure you manage your home equity line of credit and your home equity in a responsible way. This is Patrick Munro talking about what is a home equity line of credit."