Understanding Home Equity Line of Credit (HELOC)
A home equity line of credit (HELOC) works like a credit card secured by your home. You're approved for a maximum amount, then borrow what you need, when you need it, during the draw period. You pay interest only on what you use.
Because a HELOC sits behind your existing mortgage, your current first mortgage stays untouched.
Who it's a good fit for
- Homeowners with a first mortgage they want to keep
- Projects paid in stages, like remodels
- Owners who want an emergency reserve available
Key details
- HELOCs usually have a variable interest rate tied to an index.
- There's a draw period, when you can borrow, followed by a repayment period.
- Your credit limit is based on your home's value, existing mortgage balance, credit and income.
- You can pay down and re-borrow during the draw period.
HELOC questions
What's the difference between a HELOC and a home equity loan?
A HELOC is a revolving line, usually with a variable rate, that you draw on as needed. A home equity loan (HELOAN) is a one-time lump sum, typically with a fixed rate and fixed payments.
Will a HELOC affect my first mortgage?
No. A HELOC is a separate second lien, so your existing mortgage terms stay the same.
Can I get a HELOC on a rental property?
Some lenders offer HELOCs on investment property, though options are more limited than for a primary home. Ask Jake what's currently available.
HELOC financing around Eastern Washington
- Spokane, WA: Owners of older South Hill homes often use HELOCs to fund phased renovations.
- Tri-Cities, WA: Useful for adding a shop, pool or landscaping to a newer home.
- Whitman County, Washington: Used to fund shop buildings, well upgrades and remodels while keeping the first mortgage.
- Adams County, Washington: Funds shop buildings and remodels without replacing the first mortgage.
- Garfield County, Washington: Lets owners fund repairs or projects while keeping their first mortgage.
- Lincoln County, Washington: Funds shops, outbuildings and improvements on rural properties.
- Stevens County, Washington: Funds cabin updates, shops and wells while keeping the first mortgage.
- Ferry County, Washington: Funds solar, well or road improvements while keeping the first mortgage.
- Pend Oreille County, Washington: Funds docks, decks and cabin updates while keeping the first mortgage.
Related programs
Mortgage Refinance
Replace your current mortgage to change your rate, term or loan type.
Learn moreCash-Out Refinance
Refinance for more than you owe and receive the difference in cash.
Learn moreHome Equity Loan (HELOAN)
A fixed lump-sum second mortgage that leaves your first mortgage in place.
Learn moreInformation on this page is general and educational. Loan approval, terms and eligibility depend on your full application, credit, property and current program guidelines.