In this series, Tips from the Pros, MONEY taps the collective wisdom of expert financial planners.
A home equity line of credit (HELOC) is an agreement allowing you to borrow against the value of the house you are living in. Banks will look at the mortgage you have and the appraised value of your home and then decide how much money they are willing to lend you. The thing about HELOC’s is that you very often can get them when you don’t need them, but can’t apply for them when you really need them. Financial advisers suggest applying for the HELOC when you don’t need it but can get it. Then keep that HELOC as a sort of rainy day fund.