07 · Loan program

HELOC.

A revolving line of credit secured by your home equity. Borrow what you need, when you need it — pay interest only on what you draw. Your existing first mortgage stays in place, untouched. Useful when your current rate is too good to give up.

Talk it through Run your numbers
90%
max combined LTV
10yr
draw period
Var
rate (Prime + margin)
How the line works

Draw for ten years, then repay.

A HELOC is revolving, not a lump sum: pull what you need during the draw period and pay interest only on what you use. Your first mortgage stays put — useful when its rate is too good to give up.

10yr
draw period
90%
max combined LTV
Prime +
variable rate
· The structure

How it's built

Structure
Line of credit, not a lump sum. Draw period (typically 10 years) followed by a repayment period (usually 10–20 years).
Interest
Variable, tied to Prime + a margin. Some lenders offer fixed-rate conversion options on portions of the balance.
Combined LTV
Up to 90% (sometimes 95%) of home value, including your existing first mortgage. Higher CLTV = higher rate.
Minimum draw
$5,000–$25,000 typical at origination, depending on lender. Smaller minimum draws thereafter.
Closing costs
Often minimal or waived. Some lenders charge a small annual fee or an early-close fee if you pay off in the first 2–3 years.
Property types
Primary residence is standard. Second homes and investment properties available with select lenders, usually at lower CLTV and higher rate.
· What you'll need

Qualifying

Credit score
680+ typical for the best programs. Some lenders go to 660; a few go lower with higher rate and lower CLTV.
Debt-to-income
43% standard ceiling. The HELOC payment is calculated as if fully drawn at current rates — be ready for that math.
Equity
Need at least 15–20% equity remaining after the HELOC is in place. Some lenders allow less for super-prime borrowers.
Income docs
Same as a purchase loan — two years of W-2s, pay stubs, returns if self-employed.
Appraisal
Required for most HELOCs. Smaller lines (under $250k) sometimes use AVM (automated valuation) — faster and cheaper.
Property type
Primary residence is the standard offering. Second homes and investment properties available but with stricter terms.
· Straight talk

Not for you if you need a fixed, predictable payment — the rate is variable, tied to Prime, and moves when the Fed does.

When a loan I offer isn't right for you, I'll say so — and point you to the one that is.

· Common questions

FAQ

HELOC or cash-out refi — when does HELOC win?
Almost always when your current first-mortgage rate is good. HELOC keeps it intact. Cash-out replaces it. If your rate is sub-5%, you don't want to refi the whole thing — use a HELOC.
Can my HELOC rate go up?
Yes — rates are variable, tied to Prime. When the Fed moves, your rate moves. Budget for the upper end of your expected range.
What can I use the money for?
Anything. Renovation, debt consolidation, investment property down payment, business capital, education, emergency reserve. The flexibility is the point.
What happens when the draw period ends?
Typically at year 10. You enter the repayment period — no new draws allowed, principal + interest payments amortize the balance over the next 10–20 years.
Is HELOC interest tax-deductible?
Only if the funds were used to buy, build, or substantially improve the home that secures the loan. Talk to your CPA — the rules tightened in 2018.
Can I pay it off early?
Yes. Most HELOCs have no prepayment penalty, though some charge a small early-close fee if you close the line within the first 2–3 years.
· Questions left?

Ask me directly.

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