A home equity line of credit (HELOC), which lets you borrow against available equity with your home as collateral, can be a powerful financial tool for homeowners. But what if you want to increase your HELOC credit limit or use your HELOC to consolidate debt? And what happens when you reach your end of draw period? Read on to learn more.
Increase your Home Equity Line of Credit
Give your line of credit more power
With a line increase on a HELOC, you’ll enjoy:
Please note: Depending on the circumstances, it will likely be necessary to close your current line and open a new HELOC account. Upon completion of a line increase, your account will require variable-rate monthly minimum payments that include principal and interest during both the draw and the repayment period ($100 minimum required). Your account will also have an updated term of 30 years (10-year draw period and 20-year repayment period) and your existing line of credit interest rate will adjust to current interest rates.
Get started today
To submit your request securely, sign into your account through Online Banking, select the Information & Services tab and then Request a credit line increase.
Get a head start and find your home’s estimated value.
Home Equity Line of Credit Transfer
A smart way to consolidate higher interest-rate debt
- Credit cards
- Revolving charge cards (for example: home improvement stores and department stores)
- Installment loans
Transferring is quick and easy
There are no transfer fees, and your interest may be tax deductible. To get started, simply sign in to Online Banking. You can transfer funds directly from your HELOC to other Bank of America accounts, or to your creditors through Online Bill Pay.
Home Equity Line of Credit End of Draw
Preparing for your home equity line of credit end of draw
Your home equity line of credit (HELOC) is a form of revolving credit. You borrow from the available equity in your home, which is used as collateral for the line of credit.
During the draw period (or borrowing period), you can access funds through the line of credit to pay for expenses. Terms can vary, but typically the draw period will be up to 10 years, after which you’ll reach end of draw and no longer be able to borrow against your HELOC.
What you need to know
It’s important to understand which type of HELOC financing you have. This will determine your repayment method once you reach end of draw.
- Balloon home equity line of credit: When your borrowing period ends, the balance on the account will become due. A balloon payment, or a large lump-sum of the outstanding balance, will be required.
- Standard home equity line of credit: When your borrowing period ends, the repayment period will begin. You will need to make monthly payments (consisting of both principal and interest) to repay the outstanding balance.
Your minimum payments are about to change
If you were making minimal or interest-only payments during the borrowing period, you may notice a significant increase in your monthly payments when your repayment period begins. You will now be responsible for paying both principal and interest each month, so plan accordingly and don’t get caught off-guard by the larger payment amount.
Options to consider
As you near or reach your end of draw, you have the following options:
- Apply for a new home equity line of credit or other home loan. If you have an outstanding balance and are approved for a new HELOC, you can move that balance over and again borrow funds for up to 10 years to cover home improvement projects or other necessary expenses.
- Start repaying your principal balance through the repayment period.
- Pay off your balance in full, ahead of time.
- Contact a home equity specialist if you think you’ll be unable to afford your new payment. You may qualify for a program to help reduce your payment.
If you have questions about your account, please call and speak to one of our home equity specialists.