are HELOCs a practical loan? is this also the same as subprime? thanks?

Answer 1

It isn't usually subprime and I find it practical if I want to pay that much interest.
It is simply a Home Equity Line of Credit so you are borrowing as a mortgage on your house. The rates are adjustable usually based on Prime plus or minus a margin. So now are running 7.25 on up. I wouldn't want to pay that much for a car loan but it is much better than financing on a credit card.
The interest could be tax deductible and if you file bankruptcy you could lose your house or have to keep paying it.
I keep one empty as an emergency fund and borrowing a few dollars for a few days is very practical.

Answer 2

HELOCS are Home Equity Lines Of Credit. This is a loan against the equity you have built up in your own house. In some states such as Texas you can only get a home equity loan up to a certain percentage of your houses value...say 80%. Home Equity loans do have some tax advantages over a traditional personal loan and often have lower interest rates.

A subprime loan (in this case a home loan) that is given to an individual with less than ideal credit or has circumstances which lead to lender to think they are a more risky loan. This results in a higher interest rate and often other unfavorable terms for the borrower like a pre-payment penalty.

To answer your question HELOCS and Subprime are Apple and Oranges.

Answer 3

A HELOC is a home equity line of credit, commonly referred to as a "second mortgage." A subprime loan, as I understand it, is a (first) mortgage designed for people whom lenders consider to be a high lending risk, and don't qualify for traditional financing.

Answer 4

Home Equity Line Of Credit
Probably the most common form of a 2nd mortgage.