HELOC & Home Equity Loans
Tap your equity without refinancing your first mortgage: a revolving line you draw from, or a fixed lump sum.
A HELOC and a home equity loan each let you borrow against your home's equity while leaving your first mortgage in place. That's the appeal. If you've got a low rate on that first mortgage, you don't have to give it up to reach your equity.
The difference is how you receive and repay the money.
HELOC: a revolving line of credit
A home equity line of credit works a bit like a credit card secured by your home. You're approved for a limit, then draw from it as needed during a set draw period, paying interest only on what you use. HELOCs usually carry a variable rate, so the payment can move up or down over time.
Home equity loan: a fixed lump sum
A home equity loan gives you the whole amount up front, one lump sum at a fixed rate with a fixed monthly payment. It fits when you know exactly how much you need, say for a specific renovation or a debt payoff.
A strong fit if…
- You want to keep the low rate on your first mortgage
- You're funding renovations or consolidating higher-interest debt
- You want to draw as needed (HELOC) or take a set amount (home equity loan)
- You've built meaningful equity in your home
Worth weighing
- Your home is the collateral, so borrow with that in mind
- HELOC rates are usually variable, so the payment can change
- A cash-out refinance may cost less if you're already replacing your first mortgage
Run your numbers
Compare other options
Is HELOC the right fit for you?
Gene will look at your goals and compare your options with no obligation. Get pre-qualified or call to talk it through.