HELOC rules and comprehension

3 Replies

How often can you use a HELOC? If I take a loan out based on my equity, and let’s say it’s $100,000. As long as I lay that loan off I can then again re-use or re-takeout my equity loan right? Thank you guys in advance.

Thank you,

Arthur Voskanyan

As far as I know, you can "draw" on the HELOC and then pay it back as often as you want. The HELOC will eventually close at the ten year mark: at that point the "draw period" comes to an end and converts into a regular 20 year loan. At least that's the way mine works. I do it with US Bank.

There is typically a "draw period" as @Federico Morales says.  Typically five or ten years, though it can be whatever the lender says.  Essentially its like a credit card during the draw period.  During that period you can take advances on the remaining available credit and pay it back as you wish.  After the draw period, no more advances.  Sometimes it automatically converts to a fully amortizing, sometimes not.  Also be aware that the bank, just like a credit card, can reduce or zero out your credit limit at any time.   They won't force you to immediately pay the outstanding balance, but will prevent any future advances.