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Loan

Home equity lines

Borrow against the home you own, as you need it.

Ask about this loanHow applying works

What it is

How it works

A home equity line of credit lets you draw on your equity for a project or a bill and pay interest only on what you use. We explain the rate, the draw period, and what happens after it.

Who it fits

  • Owners with equity who want to keep their first mortgage and its rate.
  • Owners paying for a project in stages, like a remodel.
  • Owners who want a line on hand for costs that come up over time.

Key facts

Good to know

  • A home equity line of credit (HELOC) is a second loan you draw from as you need it, up to a limit.
  • It has a draw period, when you can borrow, and then a repayment period, when you pay back what you owe.
  • The rate is usually variable: an index, such as the prime rate, plus a margin. Your payment changes when the rate does.
  • During the draw period the payment may cover only interest. It goes up when repayment starts.
  • The lender can freeze or lower the line if your home's value falls a lot or your finances change.

Calculator

What a line could cost

You type every number. Nothing here is today's rate.

Home equity line

Your payment while you draw and once you repay, and what a rise in the rate would do. You type the rate.

$

What you expect to have borrowed from the line.

You type the rate. We never fill it in.

Principal and interest only

While you draw
—
Once you repay
—

Add your numbers to see the estimate.

This is an estimate, not a loan offer. A lender has to confirm it.

This is not a commitment to lend or lock a rate.

Rates change. Call us. (480) 297-8855

Compare what you pay today with a cash-out refinance and a home equity line, then save it as a PDF.

Compare your debts

Costs and limits

What it costs

The kinds of costs, not amounts. Your Loan Estimate lists the numbers.

Costs to expect

  • Interest only on what you have drawn, not the whole line.
  • Possible appraisal, application, and closing costs, though some lenders cover them.
  • Some lines have a yearly fee or a fee for closing the line early.

Limits

  • Lenders cap the combined balance of your first loan and the line against the home's value.
  • Your credit, income, and debts are reviewed like any loan.
  • Every line has a maximum rate in its contract. Ask what it is.

Compared

How it compares

Next to Fixed-rate second mortgage.

  • A home equity line lets you draw as you need it. A fixed-rate second mortgage pays one amount at closing.
  • A line's rate is usually variable. A fixed second keeps the same rate and payment.
  • With a line you pay interest only on what you use. With a fixed second you pay interest on the whole amount from the start.

The process

From first call to closing

  1. Talk

    A short call about your goals, your timeline, and the kind of home you want. Ask us anything.

  2. Apply

    You fill out the application online. It asks for your Social Security number and documents, and we give you a clear list of what to send.

  3. Compare

    We compare lenders for your loan and show you the options side by side, with the tradeoffs explained.

  4. Close

    We stay with you through appraisal, underwriting, and signing, and keep you posted at each step.

Questions

Questions about this loan

Not here? Call (480) 297-8855.

What happens when the draw period ends?

You can no longer borrow, and your payment changes to pay back principal and interest. That payment can be much higher than during the draw. The calculator on this page shows both.

What if rates go up?

Your rate and payment go up too, up to the cap in your contract. The calculator shows what a rise would do to your payment.

Can I change my mind after I sign?

For a line on your main home, federal law gives you three business days after closing to cancel.

Is a line better than a cash-out refinance?

If your first mortgage has a low rate, a line often costs less overall because it leaves that rate alone. We compare both with your numbers.

Reviews

From a client

Read all reviews

Chance is someone you can trust from the begging to the end of the transaction. I'm grateful to have found him to help me with the purchase of my home. Chance answered all of my questions and concerns, in detail. Couldn't have done it with out him. Buying a home can be challenging in number of things from the seller, realtor, title, etc. Chance made it easy for me, to understand, trust and believe that I was making the right decision . Thank you Chance, from my daughter and I. Sincerely, Edith Peralta, MBA/CCC

Edith Peralta

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