HELOCs
Unlock the Value of Your Home's Equity
A Home Equity Line of Credit (HELOC) gives homeowners the flexibility to access the equity they’ve built in their property while maintaining control over when and how they use their funds. Whether you’re planning home improvements, consolidating high-interest debt, covering education expenses, managing unexpected costs, or funding other major financial goals, a HELOC can provide a convenient and cost-effective borrowing solution. Jerry Ownby offers personalized HELOC solutions designed to help homeowners make the most of their home equity while supporting their short-term needs and long-term financial plans.
What Is a HELOC?
A HELOC is a revolving line of credit secured by your home. You’re approved for a maximum credit limit, and you can draw from it as needed during a set draw period. Interest is generally charged only on the amount you actually borrow. As you repay, your available credit may be restored, similar to a credit card but with a much larger limit and typically lower rates than unsecured credit.
How Much Equity Do You Have?
Equity is the difference between your home’s current value and what you owe on it. Lenders generally allow you to borrow up to a certain percentage of your home’s value, counting your existing mortgage and the new line together. Here’s a simple illustration:
| Example | |
|---|---|
| Home value | $500,000 |
| Maximum combined borrowing at 80% | $400,000 |
| Current mortgage balance | $300,000 |
| Potential HELOC limit | About $100,000 |
This is only an example. Actual limits depend on your lender’s guidelines, your credit, your income, and your home’s appraised value. Jerry can review your numbers to give you a realistic picture.
The Two Phases of a HELOC
The Draw Period
For a set number of years, you can borrow from your line as needed. Many HELOCs allow smaller payments during this phase, sometimes interest-only, though terms vary.
The Repayment Period
After the draw period ends, you can no longer borrow. You begin repaying the outstanding balance, including principal and interest, over a set term. Payments can rise at this point, so it’s smart to plan ahead.
Smart Ways Homeowners Use a HELOC
A HELOC can be useful for many goals, including:
- Home improvements: Kitchens, bathrooms, additions, or energy upgrades that can add comfort and value
- Debt consolidation: Replacing higher-interest debt with a lower-cost line, if used responsibly
- Education expenses: Tuition and related costs paid over time
- Medical or emergency costs: A financial cushion when life surprises you
- Major life events: Weddings, relocations, or family needs
- Investment opportunities: Funding for a down payment or renovation project
Because you borrow only what you need, you can match your spending to your actual costs instead of taking more than necessary.
HELOC vs. Home Equity Loan vs. Cash-Out Refinance
| HELOC | Home Equity Loan | Cash-Out Refinance | |
|---|---|---|---|
| How you receive funds | Draw as needed | One lump sum | One lump sum |
| Existing mortgage | Stays in place | Stays in place | Replaced by a new loan |
| Interest rate | Often variable | Often fixed | Fixed or adjustable |
| Best for | Ongoing or uncertain expenses | One-time, known expenses | Large needs or improving your overall mortgage terms |
If you have a low rate on your current mortgage, keeping it and adding a HELOC may make sense. If rates have dropped or you want to restructure your whole loan, a refinance might be worth comparing. Learn more about conventional loans and refinancing options with Jerry.
Important Things to Consider
A HELOC is a flexible tool, but it comes with responsibilities:
- Your home is the collateral. Missing payments could put your property at risk.
- Rates are often variable. Your payment may change as rates move.
- Payments can increase when the draw period ends.
- It’s easy to overspend. Having available credit requires discipline.
- Closing costs and fees may apply, depending on the program.
For questions about tax treatment, speak with a qualified tax professional.
Tips for Using a HELOC Wisely
- Borrow with a purpose. Have a clear plan for how you’ll use and repay the funds.
- Keep a buffer. Avoid using your entire limit if you can.
- Plan for payment changes. Know what to expect when the repayment period begins.
- Compare options. Look at all equity-access choices before deciding.
- Revisit your plan regularly. Review your balance and goals as your situation changes.
Who Is a HELOC a Good Fit For?
A HELOC may work well if you:
- Have built meaningful equity in your home
- Want flexible access to funds over time
- Plan to keep your current first mortgage
- Have ongoing projects or uncertain expenses
- Want a financial safety net
Related Financing Options
If your goals involve real estate investing, homeowners often pair equity strategies with DSCR loans, fix and flip financing, or construction loans. Homeowners age 62 and older may also explore reverse mortgages as another way to use home equity. Estimate payments with the loan calculator and check today’s rates.
Serving Homeowners Across 14 States
Jerry Ownby proudly serves homeowners throughout Arizona, Alaska, California, Colorado, Florida, Georgia, Maryland, Montana, Ohio, Texas, Utah, Washington, South Carolina, and West Virginia.
The HELOC Process, Step by Step
- Consultation: Discuss your goals and how you plan to use the funds.
- Equity review: Evaluate your home’s value and mortgage balance.
- Application: Submit your financial information and documents.
- Appraisal and underwriting: Your home and profile are reviewed.
- Approval and closing: Finalize your line of credit.
- Access your funds: Draw as needed during your draw period.
Ready to Explore Your Equity?
Call Jerry Ownby at 480-980-0900 or visit 459 N Gilbert Rd, Suite B100, Gilbert, AZ 85234 to discuss your goals and see how a HELOC could work for you.