HELOC (Home Equity Line of Credit)
A HELOC gives you access to a revolving line of credit based on your home’s equity. It works similar to a credit card — you can draw funds as needed, pay them back, and draw again during the draw period.
How It Works
Draw period — Typically 5-10 years where you can borrow up to your credit limit and make interest-only payments.
Repayment period — After the draw period ends, you repay the outstanding balance over 10-20 years with principal and interest payments.
Common Uses
Home renovations and improvements · Emergency fund access · Debt consolidation · Education expenses · Major purchases.
Requirements
Minimum 15-20% equity in your home · Credit score: 680+ · Stable income · Property appraisal may be required.