Home Equity Line of Credit

Flexible Financing with HELOC

Do you need to consolidate high-interest debt or require revolving credit for a sizable upcoming expense? If you do, a home equity line of credit, or HELOC, will provide you with the funds you need.

Home Equity Line of Credit

The draw period usually lasts up to 10 years before the repayment period starts. Your interest rate will fluctuate along with the market conditions, and you will be charged interest on your outstanding balance during the withdrawal and repayment phase.

When you take out a HELOC, your house becomes collateral for the loan as you borrow against the equity in your home. As you repay the loan every month, your HELOC credit amount increases.

A HELOC works much like a credit card or revolving loan, which means you can borrow against it as long as you keep up with your payments.

To qualify for a HELOC, your application should meet the following requirements:

  • Available equity that ensures the amount you owe on your house is less than its value
  • An acceptable debt-to-income ratio and a good credit score
  • Copies of tax returns and W-2 forms
  • Pay stubs or P&L statements if self-employed
  • Recent bank statements

couple applying for HELOC loan on laptop

two story single family home

The amount of your HELOC loan depends on the value of your home and the percentage you are allowed to borrow against. A HELOC loan can be used to pay for substantial expenses such as home renovations, which increase the value of your house.

A HELOC is a good option if you are planning to stay in your home for a long time and do renovations over a couple of years. It is also helpful when you want to consolidate debt. It is not advisable to use a HELOC for educational or recreational purposes.

Click here to read the Home Equity Application Disclosure.

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