HELOC Facts:
- HELOC or a Home Equity Line of Credit works as a credit card based on qualified home equity.
- A HELOC comes with a Draw Period [Typically 3-10 Years] and a Repayment Period [where you pay back the loan with principle].
- Interest only applies to the amount you used from your HELOC and not on the whole limit.
- There are no pre-payment penalties and you can pay back on the HELOC as and when you wish.
A complete guide for Home Equity Line of Credit [HELOC].
Wondering what a Home Equity Line of Credit or a HELOC is? In simplest terms, a HELOC is a credit line, just like the one a credit card offers, but this one uses your home equity as collateral. A HELOC lets you draw on the credit line as and when you need to, upto the credit limit decided. You only draw what you need up to the limit and pay interest on only the funds used and not the entire limit therefore reducing your payment obligation substantially compared to a Home Equity Loan or a Mortgage where you pay for entire sum regardless of what you use.
You may be wondering, why should one take out a HELOC when they can simply do a cash out refinance? Well, the rates since 2022 are not exactly favorable for a cash out refinance due to the historic low levels of 2021 when most homeowners have already taken advantage of rates below 4% fixed.
So whom exactly is a Home Equity Line of Credit or a HELOC good for? Any homeowner who needs funds over a period of time, who wants to keep a credit line open for emergencies or reserves, who wants to pay down on high interest debt or who simply wants to have funds available if they need to can choose to have a HELOC.
Why is HELOC a popular loan opion?
(1) No Closing Cost : For most eligible homeowners, a HELOC do not have any expense linked to it. Therefore it saves you thousands of dollars you would spend otherwise in cost and fees for a traditional cash out refinance.
(2) Convenient Access to funds, as and when you need them : Having a HELOC is like have a safety net, a reserve fund for uncertain times. The best thing about a HELOC is that you do not have to draw on the credit line. If you do not draw on it, you do not have any balance to make payments for.
(3) Borrow up to 95% of the value of your house : For eligible homeowners, we offer HELOC limit of up to 95% of the appraised value of their home. This in itself is a great deal because traditional cash out refinance is typically only limited to 85% LTV.
(4) No Fee to get a HELOC : As stated above that our HELOCs do not have a closing cost associated with them, we also do not have an application or underwriting fee. This is super convinient and cost effective for homeowners.
(3) Option to choose from Fixed OR Adjustable Rate : Depending on how you want to set up the HELOC, we offer flexibility to choose from a Fixed Rate HELOC or an Adjustable Rate HELOC tied to the Prime rate for your ease and convenience.
Questions? Speak with a Qualified HELOC Specialist.
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Mortgage Rates as on 07/30/2026
Conventional Loans
Rates for Primary Home Purchase
6.78%
(+0.02%)
6.32%
(+0.01%)
FHA & VA Loans
Rates for Primary Home Purchase
6.34%
(+0.02%)
6.36%
(+0.02%)
Weekly US Average Mortgage Rates as on 07/30/2026. Select a product to view important disclosures, payments, assumptions, and APR information. Please note we offer additional home loan options not displayed here. Rates for Primary Home Purchase.
Why Choose a HELOC from Us
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Get access to our wholesale pricing for Fixed and Adjustable Rate HELOC so that you can design a credit line that works perfectly with your needs.
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Toll Free +1(877)466.1211Frequently Asked Questions
A HELOC is a type of revolving credit that allows homeowners to borrow against the equity in their homes. It works like a credit card, where you have a credit limit based on the equity in your home, and you can borrow as needed.
While a home equity loan provides a lump sum upfront, a HELOC allows borrowers to draw funds as needed, up to a predetermined credit limit. HELOCs often have variable interest rates, whereas home equity loans may have fixed rates.
HELOC funds can be used for various purposes, including home improvements, debt consolidation, education expenses, or any other significant expenses.
HELOCs typically have variable interest rates that are tied to a benchmark rate, such as the prime rate. The interest rate can fluctuate over time however some fixed rate options may be available.
The draw period is the initial period, often 5 to 10 years, during which you can access funds from the HELOC. During this time, you can borrow and repay as needed. After the draw period, you enter the repayment period.
During the draw period, you are usually only required to make interest payments. Once the draw period ends, you enter the repayment period, during which you repay both principal and interest.
Yes, there are no prepayment penalties for paying off a HELOC early. You have the flexibility to pay down the balance whenever you want, which can save on interest costs.
While some lenders may offer HELOCs on investment properties, eligibility and terms may differ compared to primary residences.
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