A HELOC or home equity loan lets you borrow against the equity you've already built, at rates far below credit cards or personal loans. Use it for renovations, debt consolidation, investments, or just peace-of-mind cash on hand.
A HELOC (Home Equity Line of Credit) is a revolving credit line secured by your home, like a credit card, but at mortgage-level interest rates. Borrow what you need, when you need it, and only pay interest on what you've drawn.
A home equity loan is a fixed-amount, fixed-rate second mortgage. You get the money in a lump sum and pay it back on a set schedule. We offer both, and help you decide which one fits your goals best.
A Home Equity Line of Credit (HELOC) is a second lien that lets you borrow against the equity you've built in your home, the difference between what your house is worth and what you still owe. Unlike a cash-out refinance, a HELOC sits behind your existing first mortgage. That means you keep your current rate on the primary loan, which matters a lot for homeowners who locked in low rates in 2020 or 2021 and don't want to give them up.
HELOCs work in two phases. During the draw period, usually 10 years, you can borrow against your credit line as needed, often using checks, a debit card, or an online transfer, and your minimum payment is typically interest-only on whatever you've drawn. After the draw period closes, the loan converts to a repayment period (commonly 15 to 20 years) where you pay back both principal and interest on the outstanding balance. Most HELOCs carry a variable rate tied to the Prime rate plus a margin, so monthly payments can move when the Fed moves.
Because a HELOC is flexible credit, not a lump-sum loan, you only pay interest on the portion you've actually drawn. That makes it well suited to staged remodels, paying for college over several years, consolidating higher-rate debt, or keeping a war chest available for an opportunity you can't predict yet. We routinely structure HELOCs in second position behind a low-rate first mortgage so California homeowners can tap equity without refinancing into today's higher market rates.
HELOC and home equity loan qualifications are similar to a mortgage, but the approval process is usually faster.
Most lenders allow you to borrow up to 80–90% combined loan-to-value (CLTV). The more equity you have, the higher the line.
Typically 680+ for the best rates. Some programs go down to 640 with stronger compensating factors.
Most programs cap DTI at 43–50%, including the new HELOC payment.
Standard W-2 or self-employed income documentation. Bank-statement HELOCs available for some self-employed borrowers.
Primary residences qualify easiest. Second homes and investment properties have smaller maximum lines and higher rates.
HELOCs typically close in 2–4 weeks, much faster than a cash-out refinance.
A HELOC is a credit line you can draw from as needed, variable rate, interest-only payments during the draw period. A home equity loan is a fixed lump sum at a fixed rate, paid back on a schedule.
Usually up to 80–90% of your home's value, minus what you owe. Example: home worth $1M, you owe $400K, you may be able to borrow up to $400K–$500K combined.
If your first mortgage has a low rate, a HELOC is usually better, you keep that rate. If your first mortgage rate is high, a cash-out refi may make more sense.
Most HELOCs have variable rates tied to the Prime Rate. We do offer fixed-rate HELOC options and home equity loans for borrowers who want stability.
Most HELOCs have a 10-year draw period followed by a 10–20 year repayment period. The line stays open the whole time.
Yes, but interest is only tax-deductible when used for home-related expenses. Common uses include renovations, debt consolidation, education, and investment opportunities.
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