Increase Your Home Value
Invest in minor repairs or upgrades before the appraisal to boost your equity calculation.
Home Equity Line of Credit (HELOC): Flexible Access to Your Home’s Value
Unlock the value built up in your home with a flexible Home Equity Line of Credit, providing accessible funds for major expenses or ongoing projects.
What is HELOC?
A Home Equity Line of Credit (often called a HELOC Loan) is a revolving line of credit secured by the equity in your primary residence. Unlike a home equity loan that gives you a single lump sum, a HELOC allows you to borrow money as you need it,
up to a set credit limit, during a defined "draw period." It works much like a credit card but uses your home as collateral.
Financing depends on the amount of equity you have and your ability to manage potential new debt.
Interest is only charged on the money you actually use, not the full credit limit you are approved for.
It provides flexible, ongoing access to cash for large, variable expenses like home renovations or tuition.
Benefits of a HELOC
Choosing a Home Equity Line of Credit is a smart financial move when you need flexible access to capital without committing a fixed loan amount. The Benefits of a HELOC depend on financial control, adaptability, and cost savings.
Access Cash on Demand
You can withdraw funds whenever you need them, which is great for multi-stage renovations.
Pay Only for What You Use
A HELOC is more cost-effective than a large lump-sum loan if you don't need all the money at once.
Flexible Repayment Options
During the draw period, most HELOCs require interest only payments, keeping your monthly payment low.
Borrow and Reuse
As you pay down your balance, you free up more equity to borrow again when needed.
Competitive Rates
Since your home secures the credit line, rates are usually lower than those on personal loans or credit cards.
Types of HELOCs
While the core concept remains consistent, we can offer a few structural variations. The right choice among the Types of HELOCs depends on your comfort level with risk and your planned use of the funds.
Variable-Rate HELOC :
The interest rate adjusts periodically based on a public economic index.
Fixed-Rate Lock Option :
Allows you to convert a portion of your variable-rate balance into a secure, fixed-rate installment loan.
Interest-Only Payment HELOC :
Pay only interest during the draw period, improving short-term monthly cash flow.
Combo HELOC (Hybrid) :
Take part of your funds as a fixed-rate lump sum while keeping the rest as a flexible credit line.
HELOC for Investment Property :
Access equity from a rental property through a non-owner-occupied line of credit.
HELOC Requirements
We focus on equity and repayment capacity when assessing your eligibility. To secure the best offer, you must understand the key HELOC Requirements before you apply. These points are essential for the approval process.
High Credit Score
A FICO score of 680 or higher is mandatory to secure competitive terms and qualify with a reputable HELOC Lender.
Sufficient Home Equity
You’ll need enough home equity, with a combined loan-to-value (CLTV) usually below 80% after the HELOC is set up.
Manageable DTI Ratio
Your total monthly debt obligations must demonstrate a healthy debt-to-income (DTI) ratio, typically below 45%.
Stable Income and Employment
Documentation of consistent income is required to prove you have the means to handle the payments.
Property Condition and Appraisal
A current home appraisal is required to confirm your home’s value and determine your maximum credit limit.
Primary Residence Status
The most favorable HELOC terms and limits are reserved for lines of credit secured by your principal residence.
How to Get a HELOC with Rize Mortgage
Rize Mortgage specializes in connecting you with the most competitive HELOC programs. We simplify the application process so you understand exactly how to secure a HELOC that fits your needs.
Determine Your Needs :
Consult with a Rize loan expert to evaluate your home equity and discuss your ideal credit limit.
Pre-Qualification and Review :
We review your financial profile and estimated property value to provide a clear pre-qualification.
Application and Documentation :
Submit income, employment, and mortgage documents to begin the formal HELOC underwriting process.
Underwriting and Appraisal :
We coordinate the property appraisal to verify value and finalize your combined loan-to-value (CLTV) ratio.
Closing and Funding :
After meeting all HELOC requirements, sign closing documents to officially establish your HELOC line.
Tips to Secure the Best HELOC Rates
To ensure you lock in the most favorable interest rate and terms for your Home Equity Line of Credit, focus on strengthening your financial profile before applying.
1
Lower Your Existing Debt
Pay down credit card balances or high-interest personal loans to decrease your DTI.
2
Maintain a High Credit Score
Ensure your FICO score remains above 680 to qualify for the premium tiers of the HELOC.
3
Apply for a Lower CLTV
Request a credit limit that keeps your Combined Loan-to-Value well to help you get better rates.
4
Understand the Repayment Phase
Clearly define your plan for principal repayment when the draw period expires.
5
FAQ (Frequently Asked Questions)
Can you refinance HELOC?
Yes, you can refinance a HELOC by replacing it with a new HELOC, a fixed-rate home equity loan, or even a cash-out refinance. Homeowners refinance to lock in a fixed rate, lower monthly payments, or avoid a rate increase when the HELOC enters the repayment period. Lenders will look at your credit score, home equity, and payment history to determine eligibility.
Is a home equity line of credit interest tax-deductible?
HELOC interest can be tax-deductible if you use the funds to “buy, build, or substantially improve” the home securing the loan (IRS guidelines). Interest is not deductible for personal spending such as debt consolidation, vacations, or education. Always keep receipts for home improvements to document eligibility.
How long does it take to get a HELOC?
Most HELOCs take 2 to 4 weeks to approve, depending on the lender and whether an appraisal is needed. The timeline includes application review, income verification, credit checks, and underwriting. Some lenders offer faster approval if you have strong credit or an existing relationship with the bank.
How to take out a home equity line of credit?
To get a HELOC, you apply with a lender, verify your income and credit, and let them assess your home’s equity. Most lenders require at least 15–20% equity, a good credit score, and solid payment history. After approval, you’ll receive a credit line you can draw from during the “draw period,” usually 5–10 years. Payments are often interest-only at first, then switch to full principal + interest.
How to get a HELOC with bad credit?
You can still get a HELOC with bad credit, but you may need more home equity, lower debt, or a co-applicant to qualify. Lenders may require 30–40% equity and offer higher interest rates when credit scores are low. Improving your credit score or reducing your debt-to-income ratio can help you secure better terms. Some borrowers choose a home equity loan instead since it’s sometimes easier to qualify for.
Ready to Access Your Home Equity?
A HELOC is a powerful, flexible financial resource that puts your home’s hard-earned value to work for you. Don't let your valuable equity sit idle when you have projects to fund.
