“There’s a record amount of equity out there right now,” says Molly Boesel, a principal economist at CoreLogic, a property information and analytics provider.

U.S. homeowners with a mortgage saw their home equity increase 4.8% from the second quarter of 2018 to a year later in 2019, according to CoreLogic’s most recent Homeowner Equity Insights Report.

Want to get your hands on some of that rising value? One way to tap it is with a home equity line of credit, often referred to as a HELOC.

How a HELOC works

With a HELOC, you can borrow as much of your available equity as you want during an initial draw period, typically around 10 years. You’ll make payments in this phase, but they might be interest-only. When the draw period ends, things get serious.

During the repayment phase, typically 10 to 20 years, HELOC payments include principal and interest. Payments during this time may be drastically larger than your draw-period payments — a shocking change if you’re not ready for it.

“You always want to be careful when you use your home equity as collateral for a loan,” says Rod Raszler, vice president of mortgages at PenFed Credit Union. “You've got to make sure that you're doing it prudently and factoring in your ability to repay that loan.”

Deciding if a HELOC is right for you means asking questions. You’ll find answers below to some of the most common ones, in 10 words or less.

Answers to common HELOC questions

What exactly is a HELOC? A line of credit secured by your home equity.

How is a HELOC different from a home equity loan, or HEL? HELOCs provide revolving credit, while HELs offer a lump sum.