Educational guide · Equity
What is a HELOC?
A HELOC (Home Equity Line of Credit) is a revolving line of credit backed by the equity in your home. It works like a credit card: you have a limit, draw what you need, and pay interest only on what you draw.
Educational information only. Icon Mortgage is not yet licensed in California. No loan products are being offered.
How it works
If your home is worth $700,000 and you owe $400,000, you have $300,000 of equity. A HELOC lets you access a portion of that equity without refinancing your first mortgage. During the "draw" period you can pull funds as needed; after that you enter the repayment period.
Common uses
- Home improvements
- Consolidating higher-rate debt
- Capital to start or grow a business
- College education
- Backed-up emergency reserve
What to know
- A traditional HELOC has a variable rate; it can go up or down with the market.
- Your home is collateral — if you don't pay, you can lose it.
- Lenders typically allow access to only a portion of equity, not all of it.
- Fixed-rate "Home Equity Loans" with a lump-sum payout also exist.
Specific characteristics vary by lender. Informational only; not an offer.