HELOC
"A credit line backed by your home."
Draw funds as you need them, pay interest only on what you use. A reusable credit line secured by your home equity.
Home equity required
Min Down
680+
Min Credit
Up to 85% CLTV
Max Loan
HELOC Benefits
Everything you need to know about your benefits
Flexible Access
Draw funds whenever you need them during the draw period
Pay Only What You Use
Interest-only payments on the amount actually drawn
Reusable Credit
Repay and redraw funds during the draw period
Lower Initial Costs
Often lower closing costs than a full refinance
Keep Your First Mortgage
HELOC is a second lien, your first mortgage stays intact
Quick Access
Once approved, access funds immediately when needed
How It Works
Your path to homeownership in just a few simple steps
Get Approved
Apply for a credit line up to 85% CLTV based on your equity
Receive Your Line
Your credit line is established (e.g., $100,000 available)
Draw As Needed
Access funds via checks, debit card, or online transfer
Pay Interest Only
Make interest-only payments on the amount you use
Get Approved
Apply for a credit line up to 85% CLTV based on your equity
Receive Your Line
Your credit line is established (e.g., $100,000 available)
Draw As Needed
Access funds via checks, debit card, or online transfer
Pay Interest Only
Make interest-only payments on the amount you use
Repay & Redraw
Pay down your balance and access funds again during draw period
How Your HELOC Works Over Time
Understanding the two phases of your HELOC helps you plan your finances
Draw Period
Years 1-10
Access funds as needed, make interest-only payments
- Draw funds anytime
- Interest-only payments
- Reuse as you repay
- Variable rate
Repayment Period
Years 11-30
No new draws, pay down principal + interest
- No new withdrawals
- Principal + Interest payments
- Fixed remaining term
- Balance decreases
Example: Interest-Only Payment
Credit Limit
$100,000
Amount Drawn
$50,000
Monthly Payment
$375
At 7.5% APR, $50,000 drawn = ~$375/month interest-only
HELOC vs Cash-Out: Which Is Right for You?
| Feature | HELOC(This loan) | Cash-Out Refi |
|---|---|---|
| How You Access | Ongoing credit line | One-time lump sum |
| Interest Rate | Variable (Prime + margin) | Fixed rate |
| Loan Position | Second lien | Replaces first mortgage |
| Payment Type | Interest on balance drawn | Principal & Interest |
| Best For | Flexible/ongoing needs | Large one-time expense |
* Rates and terms subject to change. Contact us for current offers.
Frequently Asked Questions
Common questions about HELOC
Last updated:
How is a HELOC different from a cash-out refinance?
A HELOC is a second mortgage that gives you a revolving credit line—you draw funds as needed and only pay interest on what you use. A cash-out refinance replaces your entire first mortgage with a new, larger loan and gives you a lump sum at closing. HELOCs have variable rates while cash-out refis typically have fixed rates.
What is the draw period and repayment period?
The draw period (typically 10 years) is when you can access funds from your credit line and make interest-only payments. After the draw period ends, you enter the repayment period (10-20 years) where you can no longer draw funds and must pay down the principal plus interest.
Are HELOC interest rates variable?
Yes, most HELOCs have variable interest rates tied to the Prime rate plus a margin. This means your rate and payment can change over time. Some lenders offer rate locks or fixed-rate conversion options for a portion of your balance.
- You can draw up to your full credit limit during the draw period. Most lenders allow combined loan-to-value (CLTV) up to 85%, meaning your first mortgage plus HELOC cannot exceed 85% of your home value.
- Yes, you can pay off your HELOC at any time without prepayment penalties in most cases. During the draw period, paying down your balance frees up that credit to use again if needed.
- HELOC interest may be tax-deductible if the funds are used to buy, build, or substantially improve your home. Interest on funds used for other purposes (like debt consolidation or education) is generally not deductible. Consult a tax advisor for your specific situation.
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