HELOC
A revolving line of credit secured by your home equity — draw funds as you need them, repay, and draw again.
Program Overview
A Home Equity Line of Credit (HELOC) is a revolving credit line that uses your home equity as collateral. Unlike a home equity loan that provides a one-time lump sum, a HELOC lets you borrow up to your approved limit, repay, and borrow again during the draw period (typically 10 years). After the draw period, you enter the repayment period. HELOCs are ideal for ongoing expenses, renovations, or keeping a financial safety net.
Who Is This Loan For?
- ✓ Homeowners who want flexible, revolving access to funds
- ✓ Borrowers funding ongoing renovations or projects
- ✓ Homeowners who want a financial safety net
- ✓ Borrowers who prefer to pay interest only on what they use
Key Benefits
Revolving Access
Borrow, repay, and borrow again during the draw period — like a credit card secured by your home.
Interest Only on Balance
You only pay interest on what you've actually drawn, not the full credit limit.
Flexible Use
Use funds for renovations, education, emergencies, investments, or anything else.
Keep Your First Mortgage
Access equity without refinancing your primary mortgage.
Qualification at a Glance
General Requirements
- 15–20% equity minimum
- Credit score of 680+
- DTI including all obligations up to 43%
- Property appraisal typically required
- Income verification required
Advantages
- ✓ Flexible revolving access
- ✓ Pay interest only on what you borrow
- ✓ Draw period up to 10 years
- ✓ Lower rates than credit cards or personal loans
- ✓ Potential tax benefits for home improvement use
Tradeoffs to Consider
- ↔ Variable rate — payments can increase
- ↔ Home is collateral
- ↔ Draw period ends and repayment period begins
- ↔ Some lenders charge annual fees or early closure fees
- ↔ Can be frozen if home values decline
Common Scenarios
Rolling Home Renovation
A homeowner opens a $75K HELOC and draws $20K for a bathroom remodel, then another $30K for a deck the following year — paying interest only on the drawn amount.
Financial Safety Net
A well-qualified homeowner keeps a $50K HELOC open as an emergency fund, paying nothing until and unless they draw from it.
Documents Typically Needed
- Income documentation
- Property appraisal
- Current mortgage statement
- Bank/asset statements
- ID
Frequently Asked Questions
A HELOC is revolving (like a credit card) with variable rates. A home equity loan is a one-time lump sum with fixed payments. Choose based on whether you need ongoing access or a one-time sum.
Broker Disclosure: Scout Financial Group Inc DBA Airus Lending is a licensed mortgage broker (NMLS #2187418) and does not make loans or credit decisions. Airus Lending works with multiple wholesale lenders to help borrowers compare available loan options. Final approval depends on the lender, automated underwriting findings, documentation, state requirements, and overall borrower profile. Not all applicants will qualify.