What is a Home Equity Line of Credit (HELOC)?

A HELOC lets you borrow when you need it against the equity in your home.

HELOC: Home Equity Line of Credit. A HELOC is a loan that lets you use a portion of the equity in your home and borrow against it when you need it. 

Equity: Equity is the value of your home minus what you owe to your lender.  

Is your home worth more than the amount owed on the mortgage? If so, you have equity in your home and may be eligible for a line of credit secured by that equity. Unlike other loan options that payout a lump sum upon closing, a HELOC lets you draw money as needed over time.  

HELOCs are often used for home improvement projects, especially when they increase the overall value of your home. But they can also be used for other needs, like consolidating high-interest debt, education costs, having flexible access to funds, and more. Once approved for a line of credit, you control when and how much you withdraw, which means you control how much you have to repay. You also only pay interest on the amount you withdraw.  

Is a HELOC the right loan for you? Talk to our team at HCP Credit Union and help you see if this is a good fit.