A home equity line of credit, also known as a HELOC, is a loan that allows you to borrow, spend, and repay as you go, using your home as collateral. 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 up to the credit limit you establish at closing. At the end of the draw period, the repayment period begins.

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.

Citizens Community Bank does not charge a loan fee on HELOCs and will cover up to $500 in closing costs.

Once approved for a HELOC, you can generally spend up to your credit limit whenever you want. When your line of credit is open for spending, you are in the borrowing period, also called the draw period. While CCB does not require an initial draw once the credit line is set up, CCB does require a minimum draw of $500 per draw and a CCB checking account for draw deposits. The draw period is 10 years.

CCB sets a monthly payment of principal (the amount you borrow) plus accrued interest that equals 1% of your outstanding balance.

Whatever your payment arrangements during the draw period—whether you pay some, a little, or none of the principal amount of the loan—when the draw period ends you enter a repayment period. CCB’s repayment period is 10 years.