HELOC Basics: What It Is and How It Works
A home equity line of credit (HELOC) is a revolving credit line secured by your home. Unlike a mortgage, you don't receive a lump sum — you draw what you need, repay it, and draw again during the draw period.
What Is a HELOC?
A HELOC is a second (or first) lien on your property that gives you access to a revolving credit line based on your home equity. You borrow up to your approved limit, repay, and borrow again — similar to a credit card, but secured by real estate.
How Equity Is Calculated
Equity is the difference between your home's accepted value and the total of all liens against it. If your home is valued at $500,000 and you owe $300,000 on your mortgage, you have $200,000 in equity. How much of that equity a HELOC program will let you access depends on its maximum CLTV, your credit, and the program's property rules.
Draw Period and Repayment
During the draw period (typically 3–5 years for digital HELOCs), you can borrow and repay repeatedly. After the draw period ends, you enter repayment — you can no longer draw new funds and must repay the remaining balance over the repayment term.
Why Digital HELOCs Are Different
Traditional bank HELOCs often require in-person closings, appraisals, and weeks of processing. Digital HELOC programs like Aven, Figure, NFTYDoor, REMN HELIX and Deephaven use automated valuation models (AVMs) and streamlined underwriting to close in days — sometimes hours.
HELOC guidelines change frequently. This content is educational and is not a loan approval, commitment or guarantee.