What is the difference between a HELOC and a fixed 2nd mortgage?
A HELOC is a form of revolving credit secured by the equity in your home. It is an open-ended loan that can be used or paid down for the term of the loan, much like a credit card. A fixed second mortgage is similar to your first mortgage in that it is tied to the value of your home and is structured like an installment loan. It has a fixed monthly payment for a fixed term at a fixed rate. On a fixed second mortgage, all of the funds are disbursed at closing and you cannot draw against the loan again after you have paid it down.
