home equity credit line

Credit that is offered to homeowners by banks based on the amount of equity that they have in their house, condo, or coop apartment. A fee may be charged for setting up the credit line. If the credit line is used, interest is charged for the period that the money is outstanding. The homeowner may access a small portion of the credit line or the entire amount. Because funds accessed through a home equity credit line are essentially a home loan, the homeowner can deduct interest paid from income taxes on Schedule A.