Home Equity Lines Of Credit (HELOC) Use Soars

[jeffrey]

Where homeowners once built equity in their homes for the long run, they have increasingly stepped up the pace of borrowing against their home's equity in recent years through home equity lines of credit (HELOCs). According to the Federal Deposit Insurance Corporation (FDIC), outstanding debt for HELOCs increased almost 11 percent during the third quarter to $460 billion. This is a 46% increase over the same time in 2003.

HELOCs have become extremely popular due to the ease and convenience they provide. HELOCs allow you to borrow money against the equity you have built in your home whenever you need it by simply writing a check. In addition to being easily found, this is one of the cheaper loans you can get being even less expensive than home equity loans. The money borrowed is also tax deductible.

Consumer Bankers Association says the average HELOC available increased some $8,000 from 2003 to 2004 to approximately $77,500. Homeowners have used the HELOC an average of five times. They have borrowed just over $19,000 each time while a year earlier they average approximately $13,000 each time they tapped their loan.

In a sign that HELOCs have become a standard method for people to use to borrow money, some HELOCs now charge maintenance fees for those who do not tap their HELOC on a regular basis.