Home Equity Line of Credit End of Draw Options

As a borrower, your home equity line of credit (EquityLine) has an established draw period, during which you have the ability to “draw,” or borrow, from your available line of credit. As you near the end of this draw period, it is important to understand the options available to you so you may plan accordingly. Be sure to read the notices you receive from us and talk with your lender about any questions or concerns you may have.

Understanding your HELOC end of draw/balloon period

What is it?

The End of Draw/Balloon occurs when the established draw period* of your Line of Credit has ended
  • Once this period ends, you no longer have the ability to borrow additional funds
  • The interest-only payments you've been making stop, and your repayment of the loan will be either:
    • Standard - Principal & Interest term payments (likely resulting in higher monthly payments) - this applies to lines that enter a repayment period
    • Balloon - One large payment (paying off entire outstanding balance)

What's Next?

Your options include:
  • Apply for a new EquityLine (refinance) - if you are approved, your outstanding balance will roll into the new line
    • Your approved credit line will be available for another 10 years
  • Repayment Options:
    • For standard lines reaching end of draw:
      • Enter into the repayment phase to pay off the balance of the loan without any further action
    • For lines with a balloon structure:
      • Your line does not allow for repayment over time. However, if you contact your lender prior to maturity, you can modify your line to include a repayment phase
    • Pay off the outstanding balance in full

Contact your local lender prior to maturity to discuss one of the options above

To learn more, contact your local lender or call us at 1.888.FC.DIRECT (1.888.323.4732)
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