A HELOC is a flexible, revolving line of credit that allows you to borrow money as needed, up to a certain limit, similar to a credit card. HELOCs usually come with a variable interest rate, which means your monthly payments can fluctuate.

Key Features:

• Revolving Credit Line: Borrow, repay, and borrow again as needed during the draw period.
• Variable Interest Rate: Rates can fluctuate based on market conditions, potentially leading to lower initial rates but variable payments.
• Draw Period: Typically 5 to 10 years, during which you can access funds as needed.
• Repayment Period: After the draw period ends, you’ll enter the repayment period, usually 10 to 20 years, where you repay the outstanding balance.

Best For:

• Ongoing or unpredictable expenses, such as home repairs or medical expenses.
• Borrowers who prefer flexibility in accessing funds.
• Managing cash flow for irregular expenses.