Why agents care
HELOCs are one way move-up sellers fund a down payment before selling. Showing the carrying cost helps clients plan a buy-first move with their lender.
Glossary term
HELOC (home equity line of credit)
A home equity line of credit is a revolving line secured by a home's equity. Borrowers draw funds as needed during a draw period, often paying interest only, then repay principal and interest during a repayment period. Rates are usually variable.
Example
Example: drawing $80,000 at 8.5% costs about $567 a month interest-only during the draw period. If the old home sells in three months, the line is repaid from the proceeds.
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Questions by topic
HELOC (home equity line of credit): common questions
Can I open a HELOC while my home is listed?
Many lenders won't. Clients should arrange it before listing.
Is a HELOC rate fixed?
Usually variable, though some lenders offer fixed-rate options on part of the balance.
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