What is a Home Equity Line of Credit?

A home equity line of credit, also known as a HELOC, is a line of credit secured by your home that gives you a revolving credit line to use for large expenses or to consolidate higher-interest rate debt on other loans Footnote[1] such as credit cards. A HELOC often has a lower interest rate than some other common types of loans, and the interest may be tax deductible. Please consult your tax advisor regarding interest deductibility as tax rules may have changed.

How a HELOC works With a HELOC, you’re borrowing against the available equity in your home and the house is used as collateral for the line of credit. As you repay your outstanding balance, the amount of available credit is replenished – much like a credit card. This means you can borrow against it again if you need to, and you can borrow as little or as much as you need throughout your draw period (typically 10 years) up to the credit limit you establish at closing. At the end of the draw period, the repayment period (typically 20 years) begins.  Learn more about how HELOCs work

Qualifying for a HELOC To qualify for a HELOC, you need to have available equity in your home, meaning that the amount you owe on your home must be less than the value of your home. You can typically borrow up to 85% of the value of your home minus the amount you owe. Also, a lender generally looks at your credit score and history, employment history, monthly income and monthly debts, just as when you first got your mortgage.

Variable interest rate When you have a variable interest rate on your home equity line of credit, the rate can change from month to month. The variable rate is calculated from both an index and a margin… READ MORE

What is home equity and how can you use it?

Key takeaways

  • Equity represents the paid-off portion of your home: the amount you own outright (as opposed to the mortgage lender)
  • You largely build home equity via your down payment, then as you pay off your mortgage. Property value increases and home upgrades can increase your ownership stake too.
  • You can tap into your equity and use it for various expenses, via home equity loans and home equity lines of credit (HELOCs)
  • Despite competitive interest rates and tax advantages, home equity financing carries risks and extra costs.

You may feel your home belongs solely to you. But if you bought it with borrowed funds — aka a mortgage — it technically doesn’t: It also partly belongs to the lender who advanced you the funds. Your own stake in your home is expressed as your home equity — “equity” being synonymous with “ownership” in financial lingo… READ MORE

Do’s and Don’ts for Using Home Equity

Equity is the difference between a home’s fair market value and the outstanding mortgage balance. When the housing market crashed in the fall of 2007 and into 2008, many homeowners across the nation lost much, if not all, of the equity in their homes.

Homeowners who do have equity in their homes have the option to borrow money against the equity they have built up with a loan or line of credit. In both cases, the house serves as collateral, which means the creditor may seize the home and sell it if the homeowner can no longer make the payments. Tapping into your home equity can be detrimental if you enter into the contract without fully understanding the repercussions.

While risky, there are some instances when a home equity loan makes good financial sense. To help you sort out the confusion, we’ve provided some common home equity do’s and don’ts… READ MORE


Ralene Nelson, REALTOR®

FOR SALE – 181 Cedar Ridge Dr. Rio Vista
$499,900 – 2 bed/2 bath/1,433sqft

New Price $499,900 – Look no further!! This Clipper model is like a new home, completely renovated, from new sheet rock to all new cabinets throughout, new baths, laminate flooring, quartz counters, appliances, and new interior & exterior paint. Located on the 11th fairway, bring some patio furniture & enjoy the scenery. This model provides a living room/dining room & a nook/great room. Trilogy provides so many amenities, including 2 swimming pools/spas, bocce courts, billiards, tennis courts, pickleball, gym & more. READ MORE

FOR SALE – 718 Allender Way, Rio Vista

3bed/2bath/1,346sqft5,306sqft lot

$545,000 – As you approach this gorgeous home, it radiates pride of ownership. The driveway has been extended with new concrete on both sides of the home. New exterior paint with newer drought-resistant landscaping w/new walkway to front door & drip system w/timer. As you step inside, the home has new interior paint, baseboards & LVP flooring throughout. The kitchen has painted cabinets with quartz counters, a stainless sink & refrigerator. Then step out to the newly landscaped backyard w/new patio, custom pergola, 8 X 12 pool, security fence & all new perimeter fencing, as well as french drains from back to front. The primary bath has painted cabinets, new mirrors & light fixtures. His & Her closets with a barn door that provides bath privacy. The home has all-new light fixtures, hardware, a whole house fan, water filtration & softener, & reverse osmosis, and electric vehicle chargers. Just bring you furniture & enjoy this move-in ready home and bask in the sun with a BBQ. Room for RV parking. A solar lease is only $89 a month, 25 yr lease & transferable. Just bring your furniture and enjoy!! Rio Vista is a quaint little located in the heart of the Delta, close to San Francisco, wine country, and Sacramento. Enjoy water sports, fishing & duck hunting. MORE INFO

FOR SALE – 98 Bruning Ave. Rio Vista
4 bed/2.5+ bath/2,554sqft/9,583SF

$725,000 – Located in core Rio Vista, & closer to the Sacramento River, make this custom built home your next residence. This spacious home has a slate floor entry, 3+ bedrooms, 2.5 baths, livingroom, diningroom, familty room that opens to kitchen & game room. Kitchen has been remodeled with beautiful cabinets & pull out drawers, newer stainless appliances & corian counters. Family room has fireplace & opens to kitchen w/bar counter, and opens to game room. The game room opens to the back yard with large patio for entertaining. Cook that fabulous meal on the newer built-in BBQ, located in game room & serve that special drink at the bar that is equipped with sink & built-in blender and lots of cabinets for your glasswares & snacks. Game room possibly could fit a billiard table. Primary bedroom features 3 closets & bath with double sinks & walk-in shower. The two other bedrooms have closets with ample storage room. Hall bath is very roomy with shower over tub & storage and hallway has cabinets for your linens. Half bath is located off kitchen & laundry room & next to office/4th bedroom. Landscaped with automatic sprinkler system, possibly room for pool. 1/2 bath will be convenient for those swimmers. Roomy 2 car garage has storage & door to patio, home has paid solar. Bring your water toys. READ MORE

PENDING – 822 Summerset Dr. Rio Vista
2 bed/2 bath/1,800sqft/6,582sqft lot

$450,000 – Welcome to Trilogy at Rio Vista, the active adult community located near the Sacramento River, center of the Delta area. This Hatteras model is 2 bedroom, 2 bath plus den has somewhat of a private backyard. Home has an extended garage, so is 2.5 car garage, room for your golf cart or motorcycle. Kitchen has oak cabinets, white appliances & tile counters. Primary bath has jetted tub plus walk in shower. Home has livingroom/dining room & kitchen that opens up to family room, which is cozy with gas fireplace. Seller has left surround sound system. Primary bedroom views the rose garden in backyard & has access to patio w/cover. Great place for a spa. Trilogy offers many ammenities that include 2 pools (indoor & outdoor) with spas, tennis courts, bocce ball courts, billards, computer room, health center (gymn, massage & aesthetician), library, cafe, restaurant, golf course & clubs galore. Let’s make this your next home!! READ MORE

Events in Northern California this Weekend

Sidewalk Saturday, Downtown Rio Vista
9:00 AM – 2:00 PM
North 2nd Street and Main Street, Rio Vista

There will be crafts, vendors, music and fun on the streets and sidewalks of historic downtown Rio Vista. Stop by and enjoy the morning. WEBSITE

Hot August Cruise Night!
Saturday, August 19 · 5 – 9pm
Willow Park Mercantile, 205 G Street Antioch

This Annual Event is Super Fun! Cruise Downtown Antioch 5pm – 9pm All our downtown restaurants and stores will be open so come grab a bite to eat and enjoy the show. A lot of beautiful classic cars, great music and food! Come join the fun! This is a Celebrate Antioch Foundation & Rivertown Merchants Event, for more info visit. WEBSITE

Dixon Art and Wine Stroll
Saturday, August 19 · 4 – 8pm
Downtown Dixon,100 N 1st Street Dixon, CA 95620

Join is in lovely Downtown Dixon, CA, for amazing art, delicious wine and food, and a great atmosphere to enjoy them in! Stroll the historic downtown of Dixon, CA, while enjoying the opportunity to sample various wines, view unique artwork, and shopping opportunities. WEBSITE

Sacramento Banana Festival 2023
SATURDAY, AUG 19, 2023, 10:00 AM – 7:00 PM
SUNDAY, AUG 20, 2023, 10:00 AM – 5:30 PM
William Land Regional Park, 3800 W Land Park Dr, Sacramento

Go bananas at the 12th Annual Sacramento Banana Festival on August 19th and 20th, 2023, with live music, food, drinks, and fun for all age
The Banana Festival is a multicultural event celebrating cultures in Asia, Africa, and the Americas that use the banana as a source of food, art, and culture. A weekend full of banana foods, music, art, health, and family fun! WEBSITE

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Next Post

A Complete Guide to a Real Estate Transaction Coordinator

Fri Aug 25 , 2023
When it comes to being a real estate agent, there is a lot more to the process than submitting offers and handing over the keys. […]
Guide to Real Estate Transaction Coordinator

You May Like

Skip to content