Understanding HELOCs

What is a key feature of a HELOC that differentiates it from a traditional home equity loan?

• It has a fixed interest rate.

• It requires no collateral.

• It functions like a credit card with a revolving line of credit.

• It provides a lump sum of money.

For what types of expenses might a HELOC be considered?

• Daily grocery shopping

• Home improvements and college costs

• Buying a new car

• Vacation expenses

How long does the draw period for a HELOC typically last?

• 15 to 20 years

• 5 to 10 years

• 3 to 5 years

• 1 to 2 years

How is the maximum amount you can borrow with a HELOC determined?

• By the appraised value of your home minus your current mortgage balance

• Based on your annual income

• By the number of years you have owned your home

• By your credit score

What should you compare when evaluating different HELOC offers?

• The color of the lender's logo

• The lender's location

• Interest rates and fees

• The lender's advertising budget