Home / HELOC / The small payment is the draw period. It does not last forever.
Updated September 2026
HELOC guide
The small payment is the draw period. It does not last forever.
During the draw period, often about 10 years, you can take money and the payment may be interest only on what you drew. When the draw period ends, the line locks and the balance converts to a principal-and-interest payment. That payment is higher. Plan for it before you spend the line on a project you cannot refinance. The rate is variable the whole time unless a fixed-draw option is in the note. We disclose the margin before you sign. A teaser payment is not the payment in year 11.
Sending a file is not an approval and not a credit pull. We text the same business day. We do not call. If we can structure it, we name the door. If we cannot, we say so.
The screen
| Phase | What you pay |
|---|---|
| Draw period | Often 10 years. Interest on the drawn balance |
| Repayment | Principal and interest. Payment jumps |
| Rate | Prime plus a margin, unless a draw is fixed |
| New draws | Stop when the draw period ends |
What we fund
- Owners who want the real payment, not the brochure payment
- A project that will be done before repayment starts
- People comparing a HELOC to a fixed second
What we still need. Short list.
- The first mortgage balance, rate, and whether it can stay.
- A value we can support, and the cash you actually want.
- The property state. HELOC is only GA, FL, TN, AL, NC, and SC.
- Income path: full doc, bank statements, or rent on a DSCR HELOC.
Questions
Can I refinance before repayment starts?
Sometimes. Do not build the plan on a refinance that is not approved.
What if rates rise during the draw?
The payment rises. Variable means variable. Budget the stress case, not today's Prime.
Is interest-only required?
No. You can usually pay principal during the draw. The agreement says how.
Related
These are the guidelines we screen. They are not a promise that your file hits the maximum. Credit-event seasoning, occupancy, and property condition still have to be confirmed. Not a commitment to lend. We text. We do not call.