Understanding the HELOC: When Can I Borrow Money?

As you’ve researched, you may have wondered, “when can I borrow money from a HELOC?” And that’s a good question. Let’s look at the typical answer.

A home equity line of credit (HELOC) allows you to take advantage of your home’s value when you need it. To accomplish that, each HELOC is set up into two distinct phases – a draw period and a repayment period. In the draw period, you can use the HELOC like you would a regular checking account. Because most required HELOC payments are interest-only, you can choose to pay only interest. Or, you can choose to pay towards the principal of your loan in order to bring the balance down more quickly.

So, When Can I Borrow Money?

Most HELOC products offer a draw period that typically lasts 10 years. The draw period is followed by the repayment period. It’s in this phase that you’ll be required to make monthly payments that combine both principal and interest. Repayment periods usually last 20 years.

One important reason to consider a first-lien home equity line of credit is in order to maintain access to your equity.

When executed properly, this strategy can help you leverage your equity to build wealth. Why do you need to change your financial picture? Looking to buy an investment property, fund educational expenses, save for retirement, or buy the vacation home you’ve always dreamed of? A HELOC offers a different path. It’s not the expected route – but could be a better one for you.

One important reason to consider a first-lien home equity line of credit is in order to maintain access to your equity.

If you’re wondering if you can use the strategy of a HELOC with your current mortgage, you’re right. You can pay less interest if you put your entire positive cash flow toward your mortgage principal each month.

But after you’ve made the payment or mailed the check, you won’t have access to your money. And that can be a little unsettling.

We all know that life happens. And sometimes we need access to emergency funds. It’s for this reason that it’s harder to commit to this specific strategy with a traditional mortgage. Using a HELOC means you can use your entire income to pay down your debt while ensuring you can use your money when and if you need it.


If you’re cash-flow positive, in good financial standing, and have equity in your home, refinancing your current mortgage into a HELOC might be the right solution for you.

To learn more and gain financial freedom with a HELOC, take the illuminating survey here.