The article is provided by Kelly Chung at YMYWDIRECT.COM
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Home equity loans can be either closed end or open end. A closed-end HEL is structured the same way as a fully amortizing residential mortgage loan. It has a fixed maturity and the payments are structured to fully amortize the loan by the maturity date. With an open-end HEL, the homeowner is given a credit line and can write checks or use a credit card for up to the amount of the credit line. The amount of the credit line depends on the amount of the equity the borrower has in the property. Because home equity loan securitizations are closed-end HELs.
