Guide · Property
HELOC: your home's equity, as a line of credit
If your home is worth more than you owe, the difference is your equity. A HELOC lets you use part of it when you need it, without selling or changing your current mortgage.
How does it work?
It's a revolving line: during the draw period, you take what you need and pay interest only on what you use. It can pay for home repairs, pay off more expensive debt, or cover the down payment on an investment property. It works on the home you live in or on an investment property.
What does it take?
Under Lexington's general guidelines: a credit score of 650 or higher and available equity in the property.
What to know first
A HELOC uses your home as collateral. If you can't pay, your home is at risk. The rate is usually variable, so the payment can go up. And when the draw period ends, the repayment period begins, with higher payments. That's why it's best used for things that improve your situation, not everyday expenses.
The truth: your home is your family's roof before it's a source of money. Borrow only what you can comfortably repay, even if the rate goes up.
See the requirements for Home equity line of credit (HELOC) · All guides
These are Lexington Capital's general guidelines and can change. This guide is education, not an offer of credit.
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Financing is provided by Lexington Capital, not by Kevin or Retire With Kevin. Kevin is a referral partner of Lexington Capital, not a lender, and may receive a referral fee. Lexington Capital reviews every application and makes all credit decisions. Not every applicant is approved, and terms depend on the lender and your situation.