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HELOC
A revolving home equity line of credit that can be drawn as needed during a set draw period.
What is a HELOC?
A HELOC (Home Equity Line of Credit) lets homeowners borrow against the equity in their home while generally keeping their existing first mortgage in place.
What it offers
- A revolving credit line—borrow as needed up to an approved limit during the draw period.
- Interest generally charged only on the amount borrowed.
- The ability to repay and reuse available funds during the draw period.
- Rates are typically variable, so payments can change.
Common uses
- Home improvements or repairs.
- Consolidating higher-interest debt.
- Education costs or major planned expenses.
- Unexpected expenses or temporary cash-flow needs.
After the draw period ends, borrowers repay the balance under the loan’s repayment terms, and payments may increase. The home secures the loan, so missed payments can lead to foreclosure.
