Home Equity Line of Credit:
Is a special kind of loan (also known as a "revolving loan"), which is secured against a property and allows the owner to borrow and repay money at their leisure. Periodic payments of at least accumulated interest are required but the loan is fully open: i.e. it may be paid out in whole or in part at any time and, if there is still money available under the loan ceiling, the borrower may take more money for any use.  Typically, a HELOC is activated when a consumer or business entity has a short-term need to fund a project for a specific period of time.  The intended use usually falls into categories that support “life goals and objectives” such as home improvements, Annuity Investments, Business Expansion, Capitalizing Equipment, etc. The origination fees are slightly higher than a traditional Second Mortgage, however, the interest rate is lower.

By Contrast

Home Equity Loan:
A mortgage loan that is registered on title after another mortgage (the first mortgage) and, therefore, is behind the first mortgage in priority. In the event of default and sale of the property, the second mortgagee will only be paid if there are funds left after the payment of the first mortgagee.  A typical scenario that attracts consumers to a Standard Fixed 2^nd Trust Deed is debt consolidation, payoff of a HELOC after a construction project finalizes, Higher Education Tuition and other life goals that support stretching out the payments for an extended period of time.

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Emad Gergis is a Senior Loan Manager, Secondary Loan Division at Security Pacific Financial, which specializes in Sub-Prime, Home Equity Lines of Credit and Standard Fixed 2^nd Trust Deeds.  Emad heads a team of loan officers specially trained to accommodate the variety of loan requests that make up the secondary lending market.  Emad lives in Laguna Beach with his wife of 22 years and three growing kids, ages 18, 13 and 11.