Let your home’s equity
work for youLet your home’s equity work for you

A HELOC lets you use your home equity to borrow money for things you need. It provides a line of credit you can take out over certain amount of time (borrowing period) that you’ll need to repay over the repayment period. It often has a lower interest rate than other loans like credit cards or personal loans. Plus, the interest may be tax deductible if used for a home project (consult with your tax advisor).

Both allow you to borrow money you need to consolidate debt or pay for house projects. But there’s a big difference between them. A cash-out refinance replaces your current mortgage with a new one. It will have new rates, new terms, and likely be bigger than the previous mortgage (depending on how much cash you need to borrow). A home equity line of credit is a second mortgage that lets you borrow money against your home equity, without impacting your current mortgage.

The short answer is: No. If you take out a HELOC with AmeriSave, you will receive the full loan amount immediately, but can either pay it back and draw down over time, or use those funds right away. The credit is available to you over the borrowing or draw period. A Home Equity Loan requires that you take out a lump sum at one time to be paid back with the agreed upon terms and conditions.

Not necessarily! A HELOC typically has a lower interest rate than credit cards.

It’s your cash, it’s up to you! One benefit of borrowing money with a lower interest rate is to help consolidate and pay off higher rate debt like credit cards, or old bills. You can also use the money to help finish the home project you’ve always wanted to do, or finally take that vacation you’ve dreamed up. Keep in mind that there are tax implications with a HELOC. If you use the funds to make home improvements, then the interest paid on the loan is typically tax deductible. Speak to your tax advisor for more details on IRS rules related to how you’ll use your funds.

There are many factors that a lender considers including the total amount of the loan, the value of your home, your credit score and more. Lenders will typically look at a “loan-to-value ratio” (or LTV) to help determine the amount you can borrow. This is a percentage that compares the amount of your current mortgage with the appraised value of the property. If you want to see how much cash your home equity could provide, try our helpful calculator.

No. A HELOC is a separate loan. It must be paid back on the terms and conditions agreed upon, independent of your mortgage.

Just like in a rate and term, cash-out or most mortgages, there are closing costs associated with a Home Equity Line of Credit. Closing costs will vary, so be sure to review your loan disclosures prior to closing.