Draw and repayment periods
During the draw period you may be able to make interest-only payments. When it ends, the balance is repaid over the remaining term, which increases the payment.
Back to topicsHELOC
A home equity line of credit works like a credit card secured by your home. Draw what you need, when you need it, and pay interest only on what you use, while keeping your current first mortgage.
What is a HELOC?
A HELOC is a second lien that gives you a revolving credit line based on your home equity. It has a draw period, often about 10 years, when you can borrow and repay as needed, followed by a repayment period when the balance is paid down. Rates are usually variable.
Borrow as needed
Draw funds during the draw period, about 10 years.
Interest on what you use
No interest on the unused portion of the line.
Keep your first mortgage
Leave a low first-mortgage rate untouched.
Reusable
Pay it down and borrow again during the draw period.
Is a HELOC right for you?
Who it is for
- Homeowners who want flexible access to equity
- Ongoing projects like renovations
- Homeowners who want to keep a low first-mortgage rate
Benefits
- Borrow only what you need, when you need it
- Pay interest only on what you use
- Keep your existing first mortgage
- Reusable during the draw period
Things to consider
- Usually variable rates
- Payment rises when the repayment period starts
- Your home secures the line
Everything about the HELOC
Choose a topic to jump to the details.
Draw and repayment periodsSmart ways to use a HELOCHow to qualifyDraw period and repayment periodHELOC FAQs
Smart ways to use a HELOC
Phased home improvements, emergency reserves, tuition and short-term bridge needs are common uses. A HELOC gives you access without borrowing everything at once.
Back to topicsHow to qualify
Lenders typically look for combined loan-to-value (all loans on the home) of about 80% to 90% or less, solid credit and verifiable income.
Back to topicsDraw period and repayment period
A common HELOC has a 10-year draw period, often with interest-only payments, followed by a 20-year repayment period with principal and interest. Plan for the higher payment when the draw period ends.
Back to topicsHow to apply
- 1
Request a call back
Tell us about your goals. A loan officer will confirm whether this program is the right fit.
- 2
We prepare the application
We fill out the application with you and send a secure list of documents to upload.
- 3
Approval and closing
We handle appraisal, underwriting and title, keeping you updated by phone, text or email.
Documents to have ready
- Current mortgage statement
- Income documentation
- Homeowner's insurance
- Photo ID
Every file is different. Your loan officer will send an exact list.
HELOC FAQs
Have a question that is not answered here? Ask a loan officer.
Is a HELOC rate fixed or variable?
Usually variable, though some offer options to fix portions of the balance.
Can I get a HELOC on a rental?
Some lenders offer investment property HELOCs with stricter terms.
Do I need an appraisal?
Usually some form of valuation is required.
What is the difference between a HELOC and a home equity loan?
A HELOC is a revolving line; a home equity loan is a lump sum with a fixed payment.
How much can I borrow?
Many lenders allow a combined loan-to-value of 80% to 90% of the home's value, including your first mortgage.
Talk to a loan officer
Talk with us about a HELOC
Tell us a little about your plans. A licensed loan officer will call you, usually the same business day.
- No cost and no obligation
- We can fill out the application for you
- Evening and weekend calls available
Prefer to call? (800) 592-8882
Related programs
Home Equity Loan
I want a lump sum with a fixed payment
Borrow a fixed amount against your equity with a fixed rate.
Learn more
Cash-Out Refinance
I want to turn home equity into cash
Refinance for more than you owe and take the difference in cash.
Learn more
Second Mortgage
I want to borrow without refinancing
A loan behind your first mortgage: lump sum or line of credit.
Learn more