How Much Money Can You Borrow With A HELOC?
Author:
Sam HawrylackApr 3, 2024
•5-minute read
If you have equity in your home, you might wonder, “How much of a HELOC can I get?” The answer to this question depends on factors we’ll cover below. But first, let’s briefly review what a HELOC, or home equity line of credit, is and how it works.
How Do HELOCs Work?
A HELOC is a mortgage on a home, separate from your first loan. It works similarly to a credit card, as you get a line of credit. You can spend up to the limit provided and only owe interest on the funds you withdraw.
When you use a HELOC, you borrow money from an institution and can access it via a special card or checkbook. You don't need permission to use the funds as long as they’re within the limits described in your agreement. If you repay what you use, you can use it again during the draw period.
Most HELOCs have a 10 – 15-year draw period. During this time, you must make interest-only payments. After the draw period ends, you cannot access the funds and must repay the principal and interest to satisfy the loan agreement.