What is HELOC (Home Equity Line of Credit)?
A HELOC is a revolving line of credit secured by your home equity that you can draw from as needed, much like a credit card. You borrow, repay, and re-borrow during a “draw period,” usually at a variable rate, then repay the balance afterward. It offers flexibility but payments can change as rates move.
Example: A homeowner opens a $75,000 HELOC and draws $20,000 for a remodel, paying interest only on the $20,000 used rather than the full line.