Here are some common HELOC questions
What are today's rates?
HELOC rates are based on your individual qualifications, including credit score and loan-to-value.
How do I qualify for a HELOC?
In order to qualify for a HELOC, you will need to have available equity in your home. In other words, the value of your home must be more than what you owe.
How much can I borrow?
You can typically borrow up to 90% of the value of your home minus whatever you owe.
What are the terms of a HELOC?
A Home Equity Line of Credit is a 10 year loan with 2 different periods, a draw period and repayment period. The draw period is 5 years, where you have ongoing access to available funds and can use the funds how you'd like. Once the draw period ends, the account enters the repayment period. The repayment period is 5 years. During the repayment period, you can no longer draw on the HELOC, and must make principal and interest payments.
What does my credit score need to be?
The minimum score to qualify for a home equity line of credit is 650 and requires a clean credit history for the past 12 months. The higher your credit score the more options you have for a HELOC.
What kind of documents will I need to provide?
This list is not comprehensive and can grow quickly depending on your personal situation.
- Current paystubs to include the last 30 days
- Last year of W-2s (If retired, last year's Form 1099)
- Mortgage statement
- Proof of homeowners insurance
Are there closing costs?
Yes, some items that may add to your closing costs include appraisal and traveling closer, if needed.
Is the interest tax deductible?
Interest on HELOCs may be tax deductible. We recommend you consult your tax advisor regarding tax deductibility.