Line H
HELOC
Borrowing against the part you already own. Flexible, cheap to hold, and secured on the roof over your head.
- Shape
- Revolving credit line secured on the home
- Position
- Usually a second lien behind your mortgage
- Rate
- Normally variable
What the program actually says
A home equity line of credit is revolving credit secured against your home. You draw what you need during a draw period, then the line closes and you repay over a repayment period.
It normally sits behind your existing first mortgage as a second lien, so your first mortgage is untouched.
The rate is usually variable and tied to an index, which means the payment can move. Some lenders offer a fixed rate lock on part of the balance.
Many HELOCs are interest only during the draw period. The payment can rise sharply at the moment the repayment period begins.
Because it is secured on your home, a HELOC on your principal residence carries a three business day right of rescission under the Truth in Lending Act.
The security is your house. That is the entire difference between this and a credit card.
See what the payment does
Illustrative figures only. What that means.
Principal and interest, worked from numbers you choose. It carries no program specific mortgage insurance, fee or premium, because those depend on your file rather than on arithmetic.
10.0% of the price
A worked number, not a quote or an offer.
Principal and interest, monthly
$0
Property tax, homeowners insurance, any mortgage insurance and any HOA dues sit on top of this figure. They vary far too much by address for a national number to mean anything.
- Loan amount
- $0
- Loan to value
- 0%
- Total interest over the term
- $0
- Total of payments
- $0
Below 20% down, a conventional loan normally carries private mortgage insurance until you reach 20% equity. It is not in the figure above.