💳 What Is a HELOC?

A HELOC is a revolving credit line secured by your home’s equity. It works a bit like a credit card: you borrow what you need, when you need it, and you only pay interest on what you use.

🔑 Key Features

• Revolving Line: Reuse the funds as you pay them back

• Draw Period: Usually 3–10 years

• Repayment Period: Typically 10–20 years after the draw

• Interest Rate: Usually variable, but fixed-rate options exist

• Uses: Debt consolidation, home renovations, large purchases, etc.

• Payment: Interest-only during the draw, then full amortization after

✅ Common Qualifying Requirements

• Equity: Usually need at least 15–20% equity remaining after the draw

• Credit Score: Typically 680+, but some go down to 640

• DTI: Most lenders cap DTI around 45%-50%

• Max CLTV: Typically up to 85%, sometimes 90%

• Stable Income and employment

• Primary, secondary, or investment properties may be eligible

🏦 What Is a Bank Statement HELOC?

A Bank Statement HELOC allows you to tap into your home’s equity without needing to show tax returns. Instead, you qualify based on your business or personal bank statements — perfect for entrepreneurs, gig workers, or small business owners.

🔍 Key Features

• Income Verified via Bank Statements:

  • Typically 12 or 24 months of personal or business statements

  • Lenders average monthly deposits (may apply an expense factor to business accounts)

• Self-employed only (usually 1099 or Schedule C)

• Revolving Line of Credit: Borrow as needed, pay back, re-use

• Interest-Only Draw Period: Commonly 3–10 years

• Repayment Term: Usually amortized over 20 years after draw

• Loan Amounts: Up to $500k–$2M, depending on equity and lender

• Max CLTV: Typically up to 85%, sometimes 90%

• Credit Score: Often 660+, though some lenders allow 620

• No tax returns, W-2s, or pay stubs required