Consider a HELOC if you need cash but have a good rate on your first mortgage and don’t want to pay high credit card interest. HELOCs use your home equity, which you’ve built up through consistent monthly payments. Make your equity work for you.
A home equity line of credit (HELOC) is a loan where you use your home as collateral, but only borrow what you need and pay interest on what you use. It is different from a second mortgage, which is a lump sum with a set payment schedule.
HELOCs have two phases: a draw period where you can borrow up to your credit limit and pay interest only on the outstanding balance, and a repayment period where you pay off the balance owed.
HELOCs offer the advantage of having funds available when needed, with interest only paid on the amount withdrawn.