Unlock your home equity with a HELOC
Put your biggest investment to work
Put your biggest investment to work
What’s a Home Equity Line of Credit (HELOC)?
A (HELOC) allows you to borrow against the equity you’ve built in your home. You only use what you need, when you need it.
Then you’ll only repay what you’ve used and the interest on that amount. And you’ll pay less interest, because HELOC rates are often much lower than using a credit card or personal loan for those expenses.
What can I do with a HELOC?
Remodel, repair or renovate your home
Remodel, repair or renovate your home
Consolidate debt into one low-interest monthly payment
Consolidate debt into one low-interest monthly payment
Pay for unexpected expenses or major purchases
Pay for unexpected expenses or major purchases
Get funds for a wedding, college tuition and more
Get funds for a wedding, college tuition and more
Choose the HELOC option that fits best
Choose the HELOC option that fits best
Standard-Rate HELOC
A Standard-Rate HELOC lets you lock in your rate so you repay a predictable amount of interest, regardless of federal interest rate fluctuations.
Features:
- Fixed interest rate for the 5-year draw period
- 15 years to repay after the draw period
- 1-time rate adjustment allowed when repayment period starts
- Interest-only payments allowed during draw period
Standard-Rate HELOC
A Standard-Rate HELOC lets you lock in your rate so you repay a predictable amount of interest, regardless of federal interest rate fluctuations.
Features:
- Fixed interest rate for the 5-year draw period
- 15 years to repay after the draw period
- 1-time rate adjustment allowed when repayment period starts
- Interest-only payments allowed during draw period
Variable-Rate HELOC
A Variable-Rate HELOC can fluctuate based on the federal interest rate. This can benefit you if rates fall, or increase your interest payments if rates rise.
Features:
- Longer, 10-year draw period
- 15 years to repay after the draw period
- Interest rate varies based on competitive market rates
- Interest-only payments allowed during draw period
Variable-Rate HELOC
A Variable-Rate HELOC can fluctuate based on the federal interest rate. This can benefit you if rates fall, or increase your interest payments if rates rise.
Features:
- Longer, 10-year draw period
- 15 years to repay after the draw period
- Interest rate varies based on competitive market rates
- Interest-only payments allowed during draw period
Banking with heart
A home equity line of credit could be life-changing for you. Reach out to an Ent consumer lending specialist today. We’re happy to answer your questions and chat about choosing the best option for your situation.
How much equity can your HELOC unlock?
Use the calculator below to get an estimate of how much of your home equity you can borrow against.
Results from this calculation are intended for illustrative and educational purposes only. Calculators may not consider the impact of fees that may apply. Results may not be applicable to your individual situation and do not constitute an offer. We encourage you to seek advice and guidance from a qualified professional. Actual terms may differ.
Access your home equity in 3 steps
Access your home equity in 3 steps
Apply
Apply online or with one of our consumer lending specialists at 800-525-9623, option 3.
Decide on terms
Discuss the best terms for your personal situation with our lending sales team.
Make it official
Finalize the details, sign your documents and get access to your HELOC funds.
Get the most out of your HELOC
Get the most out of your HELOC
Take advantage of these free tools, articles and more. You’ll learn about how to calculate your HELOC payments, the documents you’ll need for approval, as well as more details about how HELOCs work and how they can be used.
What is a HELOC and What Can You Use it For?
Imagine unlocking a treasure chest hidden within your home—this is essentially what a Home Equity Line of Credit (HELOC) allows you to do. So, what is a HELOC? A HELOC loan lets you tap into the built-up equity of your home, offering a flexible line of credit that you can use for a myriad of purposes. You can use it for a kitchen makeover, consolidating high-interest debt, funding your child's education or as a financial safety net to cover unforeseen costs. Simply put, it transforms your home’s equity into accessible cash whenever needed.
HELOC Payment Calculator: Calculate Your Home Equity Line of Credit Payments
Repayment of a home equity line of credit requires that the borrower makes a monthly payment to the lender. For some home equity lines of credit, borrowers can make interest-only payments for a defined period, after which a repayment period begins. Interest-only payments are based on the outstanding loan balance and interest rate. During the repayment period, the payment includes both repayment of the loan principal, plus monthly interest on the outstanding balance. Loan payments for the repayment period are amortized so that the monthly payment remains the same throughout the repayment period, but during that time, the percentage of the amount that goes towards principal will increase as the outstanding mortgage balance decreases.
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Home equity line of credit FAQs
Home Equity Line of Credit FAQs
Once you get approved for a HELOC, you will need to choose how to receive your funds. This selection will kick off the draw period, so you can start making withdrawals and using these funds however you like. HELOCs tend to be less restrictive than home equity loans regarding how you spend your money. However, you may qualify for tax breaks if you use these funds on your home.
A home equity line of credit (HELOC) is a second mortgage that uses the equity in your home as collateral. If you have been making regular mortgage payments for several years or more, you should have built up equity in your home, which is the difference between your home’s value and the remaining balance on your mortgage.
Home equity is calculated as a percentage. If your home is worth $200,000 and you still owe $100,000 on your mortgage, 100,000 divided by 200,000 equals 0.5 or 50%. In other words, you have paid off 50% of your mortgage and have $100,000 in home equity.
You can use the Ent HELOC Calculator to see how much equity you have built up in your home.
Once you have home equity, you can apply for a HELOC or home equity loan at a financial institution, such as a bank or credit union. The lender will then give you access to a lump sum or line of credit based on how much equity you have accumulated. You can then use this money to repair your home to increase the property value. You will need to pay back this loan over time plus interest. If you fall behind on your payments or cannot repay the principal amount, the lender reserves the right to repossess your home as collateral.
HELOCs tend to have low interest rates, usually close to those of mortgage loans, which means you will pay less over the life of the loan compared to unsecured loans like credit cards. The loan is secured by the equity you have built up in your home, so the lender has a way to recoup their investment should you default on the loan. However, you need to make sure you can repay the loan on time to avoid losing your home.
Yes, technically, a HELOC is considered a second mortgage. You will need to repay the loan in addition to your existing mortgage.
HELOCs give you access to a revolving source of funds. The lender will let you borrow up to a certain percentage of your home equity. HELOCs usually come with adjustable interest rates that change over time. However, some lenders offer lines of credit with fixed interest rates for specific periods. Generally, the longer the fixed rate applies, the higher the interest rate.
Once you get approved for a HELOC, you can choose how you receive these funds, such as getting a check in the mail or an online transfer. HELOCs come in two phases.
The first phase is known as the draw period, which usually lasts 10 years. During this time, you can withdraw funds using your preferred method and use them however you like. Most lenders only ask that you pay off any interest you have accrued during the draw period, but you are usually free to pay more than the required amount every month.
Once the draw period ends, you can no longer access additional funds from the account and will need to start making regular monthly payments plus interest until the principal amount has been paid off. By the end of the repayment period, you will need to pay back the entire principal amount of the loan plus any interest that accrued at the agreed-upon rate. This step is known as the repayment period.
Some lenders also require a minimum draw amount, so you may need to withdraw additional funds at the end of the draw period to satisfy these requirements.
You may be able to apply for an extension to the draw period if you need more time to use the funds or aren't ready to start making regular monthly payments. However, extending the draw period only increases the amount of interest you will pay over the life of the loan. Consider making regular monthly payments to pay off the principal amount as fast as possible during the draw period. The quicker you pay off your debt, the more you will save on interest over time.
Some lenders will give you several different repayment options, which can last anywhere from 10 to 20 years or more. Again, the longer the life of the loan, the more you will pay in interest.
Your monthly payments will likely more than double during the repayment period. Consider the following example to get a sense of how these periods will affect your finances. Let's say you borrow $50,000 with an annual percentage rate (APR) of 5%; you would only have to pay around $208 a month during the draw period when only interest payments are required. Your monthly payment will increase to about $416 per month when the draw period ends. You'll need to budget for these monthly payments accordingly to make sure you don't fall behind.
You can apply for a HELOC at a local financial institution. Smaller lenders like credit unions tend to offer lower fees on $100,000-or-less loans than large banks and lenders. It’s best to shop around and compare different rates before choosing a lender.
To apply, you will need to submit the proper financial information, including a copy of your mortgage, tax returns, proof of income such as pay stubs and a credit check. Some lenders may also need to appraise your home to get a real sense of its current value. To qualify, you will also need to show that you have a history of paying your mortgage bills on time.
Most lenders ask that you have at least 15% to 20% home equity, which means you have paid off at least 15% to 20% of your mortgage.
The lender will assign you an interest rate based on your financial standing and how much equity you have in your home. The more equity you have, the lower your interest rate.
You can only borrow up to 80% of your home equity or the combined loan-to-value ratio. For example, if you have $50,000 in home equity, you can only borrow $42,500.
You can use your home equity to apply for either a HELOC or home equity loan, both of which will give you access to funds that you can use to repair your home.
But there are other ways to tap into your home equity. You can also apply for a cash-out refinance, which means replacing your current mortgage with a new loan for a higher amount. You can then pocket the extra money that comes with this loan and use it however you want.
Regardless of what type of loan you choose, you can use home equity to:
- Make repairs on your home
- Pay off high-interest debt, like credit card and medical debt
- Pay for a wedding or special event
- Go back to school
- Buy a new home
You can also use home equity to save for your next home. If you have built equity in your home and plan to sell it, you can use the profits from the sale to pay off your mortgage and then pocket the remaining amount. Put this money towards closing costs and real estate fees on your next home.
There are lots of factors to consider when taking out a HELOC. The COVID-19 pandemic has supercharged the housing market in many ways. Buyers face stiff competition when bidding on the few houses for sale.
If you are thinking of buying a new home, you might be better off waiting until the market cools off. Consider using a HELOC to increase the value of your current property. You will be in a better position to sell your home several years down the line.
Taking on another mortgage or loan will only put added pressure on your finances. There's always a risk you could lose your job or the ability to work, which could leave you further in debt. You will need to make sure you can make regular payments to avoid losing your home.
If the housing market takes a dip and your home loses value over time, there’s also a risk of going “underwater” on your mortgage, which is when you owe more than what your home is worth.
If you have trouble making ends meet and are looking for a loan to hold you over until your situation improves, a HELOC may be the best option. You can use this money as needed without making regular monthly payments during the draw period. However, you will need to find a way to increase your income before the repayment period begins.
Ent offers both standard and variable-rate HELOCs. Our standard-rate HELOC offers terms of up to 240 months, while our variable-rate option offers terms up to 300 months.
With our standard-rate HELOC, you can lock in your rate and enjoy predictable payments, no matter how federal interest rates change. Prefer more flexibility? Our variable-rate HELOC adjusts with the market, which could lower your rate if federal interest rates drop. But keep in mind that your rate could also go up if they rise.
With a variable-rate HELOC, your rate can change over time based on market conditions.
* APR - Annual Percentage Rate
Financing available on homes in Colorado. Property insurance is required. Consult a tax advisor for further information regarding deductibility of interest and charges. Refer to HELOC Pre-disclosures for more information.
Standard account and credit qualifications apply. All loans subject to final credit approval. Rates and terms are subject to change without notice and are dependent upon credit performance. Review Ent’s Important Loan Information and disclosures.
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