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HELOCs & Home Equity Loans

Explore two ways to borrow against the equity in your home, often without replacing your current first mortgage.

Two ways to access your home equity

Both options use your home as collateral, but they provide funds and handle repayment differently.

Home Equity Line of Credit (HELOC)

A HELOC is a revolving line of credit. During the draw period, you can generally borrow as needed up to your approved limit and reuse available credit as you repay it.

  • Flexible access — draw funds over time instead of receiving everything at once.
  • Interest on what you use — payments are based on the amount currently borrowed and the terms of your plan.
  • Usually variable-rate — the interest rate and monthly payment may change.
  • Two phases — a draw period is followed by a repayment period when additional borrowing typically stops.

Home Equity Loan (HELOAN)

A home equity loan provides a specific amount in one lump sum, followed by scheduled payments over an agreed loan term.

  • One-time funding — receive the full loan amount at closing.
  • Predictable structure — home equity loans commonly use a fixed interest rate and regular payments.
  • Defined payoff period — repay the balance over a set term.
  • Useful for a known expense — may fit a project or cost with a clear budget.

Which option may fit your plans?

The right structure depends on how and when you expect to use the funds, your preference for payment predictability, and the terms available to you.

  • Consider a HELOC when you expect expenses to happen in stages or want access to a reusable credit line.
  • Consider a home equity loan when you know the amount you need and prefer a lump sum with a more predictable payment structure.
  • Compare the full cost — review the annual percentage rate, interest-rate type, closing costs, account fees, payment changes, and any early-closure or prepayment terms.
  • Plan for repayment — because your home secures the debt, make sure the payments fit comfortably within your budget.

How the process works

Your loan officer will explain the available options and guide you through each step.

1. Discuss your goals

Share how much you may need, when you expect to use it, and what payment structure you prefer.

2. Review your equity

Your available equity is based on your home's value minus mortgage debt, along with applicable lending limits.

3. Complete approval

Income, credit, property information, and other documentation are reviewed to determine eligibility and terms.

4. Close and access funds

After closing and any applicable waiting period, funds become available according to the loan or credit-line agreement.

Home Equity FAQ

Common questions about HELOCs and home equity loans.

The amount depends on your home's value, current mortgage balance, income, credit profile, property type, and applicable program guidelines. A loan officer can review your situation and estimate the amount that may be available.
If you already have a mortgage and keep it in place, a HELOC or home equity loan is generally an additional mortgage secured by your home. You would make its payments in addition to your first-mortgage payment.
You generally can no longer draw additional funds and enter the repayment period. Payment amounts may increase as you repay the outstanding balance, so it is important to understand the repayment terms before opening the line.
Costs vary by product and lender. They may include appraisal or valuation charges, title-related costs, application or origination fees, annual fees, and other charges. Review the disclosures and compare the total cost, not only the initial payment.
Borrowers commonly consider home equity financing for renovations, major planned expenses, or consolidating other debt. Because the financing is secured by your home, weigh the benefit of the expense against the cost and repayment risk.
A cash-out refinance replaces your existing mortgage with a larger one and provides the difference in cash. A HELOC or home equity loan is typically separate from your existing first mortgage. Your loan officer can help you compare rates, payments, closing costs, and long-term interest.

This information is for general educational purposes and is not a commitment to lend or a guarantee of available terms. Product availability, rates, fees, credit limits, and qualification requirements vary. A HELOC or home equity loan is secured by your home; failure to meet the repayment terms could result in foreclosure. Review all disclosures carefully and speak with a licensed loan officer about your circumstances.

Ready to explore your home equity options?

Talk with an NCS loan officer about whether a HELOC or home equity loan may fit your plans.

Find a Loan Officer