HELOC lenders are beginning to limit or freeze HELOC credit lines, according to analysts.

HELOCs were defined by Credit Suisse analysts as a revolving credit generally made to prime borrowers that are in a second lien position on the property. HELOCs, which float monthly off an index that is typically the prime rate, have a draw period that is usually five to 15 years wherein the borrower pays only interest on the drawn amount. This is followed by a 10 to 20 year repayment period or a balloon payment, Credit Suisse analysts explained. The utilization rate is a measure of the amount drawn by the borrower divided by the HELOC credit line amount.

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