Home Equity Line of Credit (HELOC)

Flexible Financing Powered by Your Home Equity

Unlock the value of your home with a Home Equity Line of Credit (HELOC) from CTC Mortgage. A HELOC gives you flexible, revolving access to funds based on your home’s equity—ideal for home improvements, education expenses, debt consolidation, or simply having a financial safety net. You borrow only what you need, when you need it, and pay interest only on the amount you use.

Use a HELOC to Tap Your Home’s Equity

A HELOC is a revolving credit line secured by your home. Think of it like a credit card backed by your home equity. You receive approval for a maximum borrowing limit and can draw funds as needed during the "draw period," paying interest only on what you actually borrow. This makes HELOCs a great option for ongoing expenses such as home renovations, tuition payments, or emergency reserves.

HELOC vs. Cash-Out Refinance

If you're wondering whether to choose a HELOC or a cash-out refinance, here's how they differ:

• A cash-out refinance replaces your existing mortgage with a new one for a higher amount, giving you the difference in cash.
• A HELOC is a second loan that leaves your original mortgage untouched. It gives you the flexibility to borrow funds over time as needed.

HELOCs are often preferred by homeowners with a low mortgage rate who don’t want to refinance their entire loan. However, they usually come with variable interest rates, which can fluctuate over time.

HELOC Features & Terms

Most HELOCs offer two phases:

• Draw Period: Usually 5 to 10 years. You can borrow as needed and only pay interest.
• Repayment Period: After the draw phase, you begin repaying both principal and interest over a set term (commonly 10 to 20 years).

Additional features may include:

• Variable interest rates (tied to the prime rate)
• Interest-only payments during draw period
• Flexible access via checks, online transfers, or debit card
• Potential low or no closing costs (based on lender offer)
  

HELOC Requirements

To qualify for a home equity line of credit, most borrowers must meet the following criteria:

• Home equity: Typically at least 15-20% equity must remain after the line is established.
• Credit score: A score of 660 or higher is often required for favorable terms.
• Debt-to-income (DTI) ratio: You must demonstrate the ability to repay both your existing mortgage and the new HELOC.
• Property type: Must be a primary residence, though some lenders may allow second homes.



The exact amount you can borrow will depend on your income, credit, and total equity.

How to Use a HELOC

HELOCs are a versatile tool. Popular uses include:



• Home renovations or repairs
• Tuition or education expenses
• Medical bills or large unexpected costs
• Consolidating high-interest credit card debt
• Funding a new business or investment

Since a HELOC is secured by your home, interest rates are generally lower than unsecured options like personal loans or credit cards.

Get Started with a HELOC

CTC Mortgage can help you evaluate whether a HELOC is the right financial tool for your situation. We'll assess your current mortgage, home value, and financial goals to suggest the best solution—whether it's a HELOC or a cash-out refinance.

Ready to put your home’s equity to work? Contact us today to start your HELOC application.

Faqs– Home Equity Line of Credit (HELOC)

Answers to common mortgage questions