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What is a home equity line of credit (HELOC)?

What is a home equity line of credit (HELOC)?

A HELOC, or home equity line of credit, allows homeowners to borrow against the equity of their home. When it makes financial sense, a HELOC can work well as a tool for homeowners who require cash now as they typically offer a low interest rate and the freedom to choose what the money is used for. A HELOC is a fixed-rate line of credit with a set term. The full line of credit is disbursed, in cash, at the time of funding.

When to consider a HELOC

Pay for large costs you don't have the money for

Common uses for a HELOC include a big purchase, consolidating debt, or home renovations. In other words, big ticket items that most people don't have the money for in their bank accounts. For example, a homeowner could get a HELOC to use their home equity to pay for a new roof on their home.

Improve the value of your home

The interest you pay on a HELOC when renovating your home may be tax-deductible. If you're using your HELOC to renovate your home, you could not only potentially save on taxes, you could be raising the future value of your home, while borrowing from the current value of your home.

Getting a HELOC through Homepoint

Applying for a Homepoint HELOC can be done completely online. You can receive a decision in 5 minutes, and, if approved, fund in as few as 5 days.1 You may be able to borrow between $15,000 and $250,0002, using the equity in your house as collateral. Although the application takes only minutes, the approval process will take about 5 days.1 Many lenders will require that you have a minimum of 20% equity in your home, as well as a good credit score and low debt-to-income ratio.

Getting a HELOC through Homepoint comes with fixed APRs as low as 5.49%3, so you won’t have to worry about variable interest rates.

While HELOCs generally have a much lower interest rate than credit cards and personal loans, and a fixed rate through Homepoint can be advantageous, you should ensure a HELOC is right for your unique financial situation. If you are unsure, speak with a financial professional to ensure a HELOC makes sense for you. As with any line of credit, there are consequences if you are unable to make your payments.

Have 5 minutes? Head over to and apply for your HELOC!1

Apply for a HELOC

More questions about HELOCs? Call us at (800) 686-2404.

  1. Approval may be granted in five minutes, but is ultimately subject to verification of income and employment. A five-business-day funding timeline assumes closing the loan with our remote online notary. Funding timelines may be longer for loans secured by properties located in counties that do not permit recording of e-signatures or that otherwise require an in-person closing.

  2. HELOC amounts range from a minimum of $15,000 to a maximum of $250,000. Your maximum loan amount may be lower than $250,000 and will ultimately depend on your home value and the equity you have in it at the time of application. We determine home value and the resulting equity through independent data sources and automated valuation models.

  3. APRs start at 5.49% for the most qualified applicants and are higher for other applicants. For example, for a borrower with a CLTV of 45% and a credit score of 800, a five-year Homepoint Home Equity Line with an initial draw amount of $50,000 would have a fixed annual percentage rate (APR) of 5.49% and a 4.99% origination fee. Your total loan amount would be $52,495. You will be responsible for an origination fee of up to 4.99% of your initial draw, depending on the state where your property is located. The advertised rate is only available to borrowers using primary residences as collateral. Your actual rate will depend on many factors such as your credit, combined loan-to-value ratio, loan term, and occupancy status. The advertised rate of 5.49% includes a discount for enrolling in autopay (0.25%). APRs start at 5.74% for customers that do not opt into autopay. Property insurance is required as a condition of the loan and flood insurance may be required if your property is located in a flood zone.

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Ann Arbor, MI 48105
Toll Free: (800) 686-2404
NMLS# 7706

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