A credit line with a fixed amount to be drawn. When this amount has been drawn, the draw period is over and no additional funds can be drawn.

CREDIT LINE

Commercial Credit Line is a line of credit granted to a business for a specific time to provide capital. The amount to draw is usually taken in a few draws.

DRAW

A request from the borrower to obtain money from the unadvanced portion of the loan balance.

DRAW PERIOD

The time the borrower has to draw the funds set aside in the credit line loan.

HOME EQUITY

Home Equity Line of Credit (HELOC) is a line of credit secured by real estate. The draw term and the repayment period are longer. The amount to draw can be all or part, usually with a minimum amount for a draw.

OPEN END

A credit line where the borrower can draw the amount of the difference between the original amount and the unpaid loan balance. As the balance is paid down, the borrower can draw the amount again until the draw period ends.

PAID OFF PERIOD

The number of months the credit line has to be paid off. Lenders do not want to become co-partners with the borrower to provide capital for the business. The credit line has to be cleared up for this period of time.

REVERSE EQUITY

Home Equity Conversion Mortgages (HECM). A qualified borrower (usually 65 or over) can arrange an amount to draw from the equity in the home for living expenses, etc. This amount can be taken in draws or as monthly payment. The borrower need not repay the loan. The loan is paid at the time the borrower dies or when the property is disposed of.