The draw period is the initial phase of a home equity line of credit (HELOC), during which you can withdraw funds, up to your credit limit. The draw period typically lasts up to 10 years. During this time, you’re usually only required to pay interest on what you borrow. At the ...
When you’re approved for a HELOC, you will also be approved for a credit limit based, in part, on how much equity you have in your home. You can use this line of credit during what is called thedraw period. This is the amount of time you have to draw funds from the HELOC. The...
Repayment period.After the draw period, you'll enter the repayment period, where you can no longer borrow money. You'll follow a repayment schedule to zero out your balance by the end of the period, which is usually 20 years. Alternatively, your lender may require you to make a large "...
The maturity date on a HELOC is when your draw period ends, and you must start repaying the principal plus interest—no more borrowing. It’s the official transition into repayment, sometimes called the reset date. Knowing this date is key to planning your finances, so you’re not caught ...
How you borrow: Accessing a HELOC is similar to using a credit card. You can draw from the credit line, repay and borrow again during the draw period. That can last 3-10 years or more, depending on the lender. Variable interest: Having a variable interest rate on a HELOC means it can...
It’s easy to tap into the funds in your HELOC. You can transfer money to a checking account through online or mobile banking, by phone, at a branch or using a checkbook that your lender will give you to access your funds. During the draw period, you have required monthly payments whic...
The credit limit is based on the equity you’ve built in your home, and you can borrow as little or as much as you need, up to that limit. How does a HELOC work? A HELOC typically consists of two phases: the draw period and the repayment period. Here’s how it breaks down: ...
A home equity line of credit, or HELOC, is a type of second mortgage that lets you access cash as needed based on your home's value.
Typically, this product has a rate-fixing mechanism that can be used from the start. Or borrowers may choose to lock in a rate on some or all of their existing balance at any time during the loan's draw period, which is usually 10 years. These lines of credit are also called "convert...
During an initialdraw period, you can spend the funds using dedicated checks, a draw debit card or online transfer. You’ll need to make monthly interest payments on the amount you borrow, but as you pay back your HELOC, the funds will be replenished. This draw period typically lasts 10...