Home Equity Line of Credit

HELOCs are the most common type of secured LOC. A HELOC is secured by the market value of the home minus the amount owed, which becomes the basis for determining the size of the line of credit. Typically, the credit limit is equal to 75% or 80% of the market value of the home, minus the balance owed on the mortgage.

In Bank of Shaoxing, HELOCs often come with a draw period (usually 10 years) during which the borrower can access available funds, repay them, and borrow again. After the draw period, the balance is due, or a loan is extended to pay off the balance over time. HELOCs typically have closing costs, including the cost of an appraisal on the property used as collateral.