Lending Lessons with Regan: 4 Questions I Get Most Often About HELOCs

Author: Regan Carlo, VP of Operations

Here are the four most common questions I get about Home Equity Lines of Credit (HELOCs):

1. How often does the rate change? Metco’s HELOC has a variable rate that can change on the first day of January, April, July and October. This rate change follows the Federal Reserve Prime Rate. If the Prime Rate decreases or increases, so does your loan rate.
2. If the rate changes, does my payment change? No. Your payment amount stays the same, even if the rate increases or decreases.
3. How is my payment calculated? Just like any loan, your payment is based on the interest rate, amount borrowed and payoff term.
4. How long can I leave my HELOC open without using it? Once your HELOC is approved, you can access your available funds for up to 10 years, up to your approved credit limit, without having to apply for a new loan. That flexibility is one of the biggest advantages of a HELOC.

HELOCs are one of the most flexible and sensible financial tools I know of, but they’re also one of the least understood. Have questions? Let’s talk—I’d love to help you understand how a HELOC could give you some extra financial wiggle room.