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Understanding a HELOC

Make the Most of Your Home’s Equity What is a HELOC? A Home Equity Line of Credit (HELOC) is a revolving line of credit secured by the equity you’ve built in your home. It works a lot like a credit card: you’re approved for a certain amount, and you can borrow from that amount as needed. The key difference? A HELOC typically offers lower interest rates because your home is used as collateral. If you’re a homeowner, you may have built up substantial equity in your home over time. Using a HELOC is a flexible financial tool that allows you to tap into equity when you need it. At Texas Bay Credit Union, we have an award-winning team that can help you understand how a HELOC works, its benefits, and how to use it wisely. The Two Phases of a HELOC Your HELOC has two main stages: Draw Period (Typically 3-5 Years) Borrow funds as needed. Make interest-only payments on the amount you use. Similar to a credit card, you can reuse the available credit as you pay it down. Repayment Period (1...