Can I renew a HELOC* at the end of it's draw period?

Published February 1, 2021

Guidance on what happens when a HELOC draw period is ending:

Credit Union of Texas members that often ask our HELOC specialists, “If I get to the end of my draw period, is that it? Am I done? Can I not do anything again?” Most members say their HELOC has been great, they have enjoyed using it & want to continue using it. The great news is you absolutely can renew that line of credit when it’s term comes to an end & extend the draw period on your HELOC.

One of our members had put his first kid through college with a home equity line of credit. His draw period was ending soon, & his other child was a senior in high school. He wanted to renew his HELOC & use it to pay for his second child to go to college. This member was able to call CUTX, renew the line of credit & use it to put his second child through school with the funding.

Key Takeaways

  • Yes, a HELOC can be renewed at the end of the draw period

  • A HELOC is a fast and easy way to get access to additional funds over and over again

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*Fixed rate home equity line of credit: Loan has a draw period of 10 years, followed by a repayment period. Interest only payments during the 10-year draw period and will be re-amortized at the time the repayment period begins. If interest only payments are made during the draw period, the loan balance will not decrease.

Variable rate home equity line of credit: Credit Union of Texas offers a variable Annual Percentage Rate (APR) based on the Prime Rate as published in the Money Rates section of The Wall Street Journal (the “Index”) plus a margin based on creditworthiness and credit limit. As of July 27, 2023, the index value is 8.50% . The floor APR will be 3.00%. An increase in the Index will result in an increase in the periodic rate which, in turn, will result in higher payments. In no event, will the APR increase by more than 18% or the maximum rate allowed by applicable law.

The minimum advance during the draw period is $4,000. Property insurance is required, including flood insurance where applicable. Texas homestead properties are limited to 80% combined loan to fair market value for home equity financing. All loans are subject to credit approval and Credit Union of Texas lending policies. Other restrictions may apply. In Texas, there is a 12-day cooling off period on all HELOCs. There is also a three-day right of rescission after closing before the funds may be disbursed. Actual time of funding may differ depending on appraisal, title and other underwriting requirements. This is a limited time offer and is subject to change at any time without notice. The account is subject to application, credit qualification, and income verification; additional evaluation and verification criteria may apply. CUTX home loan programs are only available in Texas. Credit Union of Texas NMLS #576560. Membership required.