Equity in real estate is one of the most powerful wealth generating tools in the current economy because equity provides financial leverage. Equity is determined by the difference in the appraised market value of a given property and the amount of debt (mortgage) secured to the property. Lenders can provide a loan in the amount of some or all of the equity and typically with an interest rate that is less than an unsecured personal line of credit. These types of loans are often referred to as a home-equity line of credit (HELOC) or secured line of credit. A HELOC typically operates like a credit card that has an open term (no maturity date) and interest is paid on the utilized credit, which can be paid off at any pace as long as the monthly minimum interest payments are made. A HELOC can be used for many purposes, such as; Construction Loans or Debt Consolidation.