HELOC and home equity loans
Two ways to borrow against equity in an eligible home.
How it works
Equity is the home value minus what you owe on it. A home equity loan gives an approved lump sum. A home equity line of credit (HELOC) gives a revolving line you can draw from during its draw period. Either may sit alongside your first mortgage.
From first check to loan choice
- 1
Estimate equity
Review the home value, current mortgage balance, and lender borrowing limit.
- 2
Choose the structure
Compare a one-time lump sum with a line you draw only when needed.
- 3
Stress-test payments
For a HELOC, examine the variable rate and payment after the draw period ends.
What affects your decision
HELOC
Rates are often variable. Payments may rise if the rate changes or when principal repayment begins.
Home equity loan
Usually provides a fixed amount with a set repayment schedule. Terms depend on the lender.
Home as collateral
Both are secured by your home. Missed payments can put the home at risk. Compare fees and total cost with a cash-out refinance.
Prepare for a conversation
Documents to have ready
Mortgage statement, home value estimate, income records, identification, and any property or insurance records the lender requests.
Ask this question
What happens to my payment after the HELOC draw period, and what are the closing or annual fees?
This page is general education. Program terms, rates, fees, and eligibility depend on the lender and your application.
Compare the whole cost
Ask for the applicable loan or HELOC disclosures, interest rate, fees, payment terms, and cash needed. A HELOC APR generally does not include fees in the same way as a closed-end mortgage APR. Review the draw period, repayment period, rate changes, and any balloon payment.
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