diff --git a/Home-Equity-Line-Of-Credit.md b/Home-Equity-Line-Of-Credit.md
new file mode 100644
index 0000000..4ae6029
--- /dev/null
+++ b/Home-Equity-Line-Of-Credit.md
@@ -0,0 +1,50 @@
+[hud.gov](https://www.hud.gov/topics/avoiding_foreclosure/foreclosureprocess)
A home equity credit line, or HELOC (/ ˈhiːˌlɒk/ HEE-lok), is a revolving kind of secured loan in which the lender concurs to lend an optimum amount within a predetermined duration (called a term), where the collateral is the borrower's residential or commercial property (comparable to a second mortgage). Because a home typically is a customer's most valuable property, numerous homeowners utilize their HELOC for significant purchases or tasks, such as home improvements, education, residential or commercial property investment or medical expenses, and choose not to use them for daily expenditures. [1]
+
A factor for the popularity of HELOCs is their flexibility, both in regards to loaning and repaying. Furthermore, their popularity might likewise come from having a better image than a "second mortgage", a term which can more straight suggest an undesirable level of debt. However, within the loaning market itself, HELOCs are categorized as a second mortgage. [2] HELOCs are typically provided at [attractive rates](https://www.seasideapartments.co.za) of interest. This is because they are protected versus a borrower's home and hence viewed as low-risk financial products.
+
However, due to the fact that the collateral of a HELOC is the home, failure to pay back the loan or meet loan requirements may result in foreclosure. As an outcome, loan providers normally need that the debtor maintain a certain level of equity in the home as a condition of supplying a home equity line, normally a minimum of 15-20%. [3]
+
Differences from conventional loans
[usa.gov](https://www.usa.gov/foreclosure)
+
A HELOC varies from a standard home equity loan because the debtor is not advanced the whole sum up front, however uses a line of credit to borrow amounts that amount to no greater than the credit limit, comparable to a credit card.
+
The regard to a HELOC is split in 2 distinct periods. During the "draw period", the consumer can use their HELOC like a revolving facility. Draw periods typically last 10 years. [4] During this time, the customer can drawdown funds, pay back and redraw again as lot of times as they wish, just paying interest on their exceptional balance. The draw period is followed by the "repayment duration" where the impressive balance plus interest is due, either as a lump-sum balloon payment or according to a loan amortization schedule.
+
Early repayment can generally be made at any time in the term and are either capital and interest or interest just ("minimum payment"). Repayment amount can range from the minimum payment to the complete drawn quantity plus interest. Lenders determine the [quantity](https://roostaustin.com) they can lend to a borrower based on 2 variables: 1) the worth of the security residential or [commercial property](https://shubhniveshpropmart.com) and 2) the [debtor's credit](https://marakicity.com) reliability. [5] This is revealed in a combined loan-to-value (CLTV) ratio.
+
History of HELOCs
+
United States
+
HELOCs became popular in the United States in the early 2000s, in part due to the fact that banks were using ad campaigns to motivate customers to take out mortgage, [6] and since interest paid was usually deductible under federal and many state income tax laws. [7] This effectively decreased the cost of loaning funds and provided an attractive tax reward over conventional methods of borrowing such as charge card. Whereas a lot of mortgages are provided at fixed rates, HELOCs are normally offered at variable rates due to the flexibility embedded into a 10-year draw period where rates of interest might change.
+
HELOC abuse is typically pointed out as one reason for the subprime mortgage crisis in the United States. [8] In 2008 significant home equity loan providers including Bank of America, Countrywide Financial, Citigroup, JP Morgan Chase, National City Mortgage, Washington Mutual and Wells Fargo started informing debtors that their home equity credit lines had actually been frozen, lowered, suspended, rescinded or restricted in some other manner. [9] Falling housing costs have led to customers having decreased equity, which was viewed as an increased danger of foreclosure in the eyes of lending institutions.
+
After Tax Cuts and Jobs Act of 2017, interest on a HELOC is no longer deductible unless the loan is used for significant home improvement. [10] In 2020 C.E. JPMorgan stopped thinking about applications for HELOCs. [11]
+
Canada
+
Similarly to the US, the HELOC market in Canada grew by 20% a year in the early 2000s, representing $35 billion in 2000 to approximately $186 billion in 2012. Looking at non-mortgage customer debt, the share of HELOCs grew from 10% to 40% in that time. To put this breakthrough into perspective, charge card regularly represented around 15% of the market share through this duration. [12] The main drivers for this developing market were low-interest rates and sustained increasing residential or [commercial property](https://luxuryproperties.in) rates. [13] Both conditions were beneficial to consumers, as the growing equity in their residential or commercial properties represented an [exceptional chance](https://cn.relosh.com) to protect larger and longer loans.
+
In the of the 2008 crisis, need for HELOCs stabilized and grew by approximately 2% annual. [14] This slower growth could be credited to a lower demand, remarkably low rates on mortgages and a more regulated market. Indeed, the economic crisis has pushed the Canadian government to take measures focused on reducing the dangers related to taking a HELOC. Some of these steps might have affected the growth of the HELOC market, restricting the need on the consumer side and making loaning requirements tighter.
+
A 2011 choice to make HELOCs ineligible for government-backed "portfolio insurance coverage" was among them. This insurance was used by lenders to "securitize pooled mortgages through the National Housing Act Mortgage-Backed Securities (NHA MBS) program". [15] Another measure was the Office of the Superintendent of Financial Institutions (OSFI) choice to cap the maximum LTV ratio for HELOCs at 65%, thus restricting the quantities house owners could leverage from their residential or commercial property. [16] Underwriting rules were likewise made more stringent through the Residential Mortgage Underwriting Practices and Procedures Guideline. [17]
+
UK
+
Despite the expansion of HELOC items in the US and Canada, the UK market did not have a similar product offering pre-2021. This is substantial as the UK market has actually traditionally replicated ingenious monetary products established in the US, such as charge card or online payments. [18] This can be partly associated to the truth that the UK banking system is highly combined with little item development among the significant lenders. [19] This changed in the post-pandemic context, where development in the monetary services market has actually accelerated, with 'fintechs' introducing new products to the marketplace. [20]
+
The very first UK HELOC product remained in 2021, by the fintech Selina Finance. [21] As of 2022, regardless of less than 5% per capita utilisation of HELOC items compared to develop, established markets such as the US and Canada, UK consumers have actually revealed increasing tendency to utilize HELOC items as an alternative to existing customer financing tools. As a result, yearly HELOC originations have increased fivefold, from $50m in 2021 to $250m in 2022.
+
In the UK nevertheless, offset mortgages have actually been common for several years, which is a primary type of loaning versus a residential or commercial property. The current business that provide these products are Yorkshire Building Society, Coverntry Building Society, Clydesdale Bank & Accord Mortgages. A main advantage of offset mortgages is that they have charge complimentary options, whereas Selina Finance's choice comes with a minimum fee of over ₤ 1300.
+
Brazil
+
In spite of high rate of interest for consumers in Brazil, which are historically among the highest worldwide, often above 200% per year, and sometimes, going beyond 430% each year for revolving charge card debt, [22] home equity credit line (HELOC) were not provided in the country prior to 2023. In 2022, almost 80% of Brazilian households ended the year in debt (typically with very expensive rates), a record because the CNC - National Confederation of Commerce - began looking into the topic in 2011. [23] The very first Brazilian company using a HELOC product was licensed to run by the [Central Bank](https://betnet.et) of Brazil in June 2023. It was the fintech ZiliCred (trading name)/ All In Cred (business name). [24]
+
[ZiliCred estimates](https://staystaycations.com) that the marketplace potential of home equity credit line (HELOC) in Brazil represents something like 12% of operations linked to residential or commercial property assurances, which represents around BRL 420 billion. [25] ZiliCred HELOC closing costs are around CDI rate plus a flat rate (0.99% to 1.99%) each month, which represents typical savings around 95% when compared to rates of interest from other revolving credit lines. ZiliCred uses a fee complimentary choice when HELOC is contracted straight with the Company.
+
The introduction of HELOC in Brazil is a noteworthy advancement in the nation's financial landscape. It can boost monetary flexibility, lower borrowing costs, and offer property owners with a valuable tool to manage their financial resources better. This empowerment can lead to better financial decision-making, decreased dependence on high-cost customer debt, and eventually a greater quality of life for numerous people.
+
References
+
^ Costagliola, Diane. "7 Reasons To Use Home Equity". Bankrate. Retrieved 2022-09-22.
+^ "Second Mortgage vs. Home Equity Loan: Which Is Better?". SmartAsset. 2022-03-08. Retrieved 2022-09-22.
+^ "What Are The Requirements For A HELOC? - Forbes Advisor". www.forbes.com. Retrieved 2022-09-22.
+^ "My loan provider used me a home equity line of credit (HELOC). What is a HELOC?". Consumer Financial Protection Bureau. 24 February 2017. [Retrieved](https://www.masercondosales.com) 2022-09-22.
+^ "How Much HELOC Money Can I Get? - Forbes Advisor". www.forbes.com. Retrieved 2022-09-22.
+^ Story, Louise (2008-08-15). "Home Equity Frenzy Was a Bank Ad Become A Reality". The New York City Times. ISSN 0362-4331. Retrieved 2022-09-22.
+^ "Is a home equity line of credit tax-deductible?". hsh.com. Retrieved 2022-09-22.
+^ E., Khandani, Amir (2009 ). Systemic danger and the refinancing ratchet impact. National Bureau of Economic Research. OCLC 476699518. cite book: CS1 maint: multiple names: authors list (link).
+^ Tedeschi, Bob (2008-06-08). "Shrinking Lines of Credit". The New York Times. ISSN 0362-4331. Retrieved 2022-09-22.
+^ Rae, David. "Can I Still Get A Tax Deduction For My HELOC Mortgage?". Forbes. Retrieved 2022-09-22.
+^ "2 years after HELOC pullback, JPMorgan once again eyes business". American Banker. 2022-05-23. Retrieved 2022-09-22.
+^ Bank of Canada. (December 2014). Financial System Review and Statistics Canada (September 15, 2016). "The Daily: National balance sheet and monetary flow accounts, 2nd quarter 2016.".
+^ Bailliu, Jeannine, Katsiaryna Kartashova and Césaire Meh. (2012 ). "Household loaning and costs in Canada." Bank of [Canada Review](https://michiganhorseproperty.com).
+^ Home equity lines of credit: market trends and customer issues: public research report. Financial Consumer Agency of Canada. [Ottawa]: [Financial Consumer](https://casaduartelagos.com) Agency of Canada. 2017. ISBN 978-0-660-08671-2. OCLC 1026342901. point out book: CS1 maint: others (link).
+^ Home equity credit lines: market patterns and customer issues: public research study report. Financial Consumer Agency of Canada. [Ottawa]: Financial Consumer Agency of Canada. 2017. ISBN 978-0-660-08671-2. OCLC 1026342901. point out book: CS1 maint: others (link).
+^ Canada, Financial Consumer Agency of (2017-06-07). "Getting a home equity line of credit". www.canada.ca. Retrieved 2022-09-22.
+^ Office of the Superintendent of Financial Institutions Canada (October 2017) - Banks/FBB/T & L/CRA/Life/ P&C-- B-20 Residential Mortgage Underwriting Practices and Procedure.
+^ "Put it on the plastic: Barclaycard, the UK's very first credit card, turns 50". The Guardian. 2016-06-29. Retrieved 2022-09-22.
+^ "Innovation in banking and monetary services". www.libf.ac.uk. Retrieved 2022-09-22.
+^ Forrester. "In 2022, Banks Are Refocusing Their Efforts On Innovation, Sustainability, And IT Improvements". Forbes. Retrieved 2022-09-22.
+^ Lunden, Ingrid (2022-02-08). "Selina raises $150M to dish out versatile loans that take advantage of home equity". TechCrunch. Retrieved 2023-04-29.
+^ Nunes, Dimalice. "Juros do cartão de crédito caem para 437,3% em junho, diz Banco Central". CNN Brasil. Retrieved 2023-11-01.
+^ "Quase 80% das famílias brasileiras fecharam ano de 2022 endividadas". Agência Brasil (in Brazilian Portuguese). 2023-01-19. Retrieved 2023-11-01.
+^ "Ex-executivo do Citi no Brasil recebe autorização para criar sociedade de crédito direto". Valor Econômico (in Brazilian Portuguese). 2023-06-12. Retrieved 2023-11-01.
+^ "Fintech vai oferecer rotativo com garantia imobiliária". Valor Econômico (in Brazilian Portuguese).
\ No newline at end of file