A HELOC (Home Equity Line of Credit) is a revolving credit line secured by your home equity — like a credit card with much lower rates. Draw funds as needed during the 10-year draw period, pay interest only on what you use. Dream Financial Management connects you with 500+ lenders since 1994.
Typically 10 years
Draw funds as needed up to your credit limit. Pay interest only (or interest + principal) on the amount you've drawn. Minimum monthly payments often interest-only. You can repay and re-draw — it's revolving credit.
Typically 20 years
No more draws allowed. Full principal + interest payments begin. Payments increase significantly — plan for this. The remaining balance is amortized over the repayment term.
| Feature | HELOC | Cash-Out Refinance |
|---|---|---|
| Structure | Second lien (keep first mortgage) | Replaces entire mortgage |
| Rate Type | Variable (usually) | Fixed |
| Access to Funds | Draw as needed (revolving) | Lump sum at closing |
| Closing Costs | Low ($0-500) | 2-5% of loan |
| Best For | Ongoing projects, want to keep low rate on first mortgage | Large one-time need, want fixed rate |
Dream Financial Management evaluates your home equity and financial goals to find the best HELOC or home equity solution. 500+ lenders. Since 1994.
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