HELOC
A revolving line of credit secured by home equity. You draw what you need and pay interest only on what you draw. Rates are usually variable.
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Where this comes up in a sale, and what follows
- Buyer's inspection (comes before)
Part 1 of 4
Why a seller cares
A home equity line is a second lien on your home, and it has to be paid off and closed at your sale, not just paid down. A line left open can hold up closing even at a zero balance.
Part 2 of 4
A simple example
You have a $50,000 HELOC with a $12,000 balance. At closing the $12,000 is paid and the lender is asked to close the line and release the lien.
| What happens at closing | What follows |
|---|---|
| The balance is paid and the line is closed | The lien is released and the sale is clean |
| The balance is paid but the line stays open | The lien stays too; the title company will insist on closing it |
| The HELOC was forgotten | The title search finds it, and it is paid from your proceeds |
A HELOC is a lien with a balance. Paying it off is half of clearing it.
Part 3 of 4
What people get wrong
That a paid-off line is gone. Until the lender records a release, the line is still a claim on the house.
Part 4 of 4 · where to read next
Where it appears in the sale
What a definition is, and what it isn't
Keighbor is a software company, not a law firm, brokerage, or tax adviser. This is general information, not legal, tax, financial, or real estate advice about your sale. Your situation may differ. Before acting on a contract, disclosure, title, tax, or pricing question, ask an appropriately licensed professional in your state.
Written and researched by Keighbor Research · drawn from the reference glossary · how we research and check what we publish
In your Room, this word explains itself where it appears.
Your Room defines heloc in the step you meet it in, beside the document or the date it belongs to. Free to set up, with an agent or on your own.
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