10 Questions To Ask Before Getting a HELOC

Not sure what to ask when comparison shopping for the best home equity line of credit? This convenient checklist covers the important points to address when shopping for a home equity line of credit or HELOC.

1 Is there a pre-payment penalty? If yes, what are the terms?

2 What is the draw period, and is an initial draw required?

3 Is there a monthly or annual limit on the number of draws?

4 What is the minimum draw amount?

5 What methods are acceptable for accessing funds (debit card, checkbook etc.).

6 What are the total fees and costs?

7 How frequently can the rate adjust?

8 What is the interest rate cap?

9 What triggers a demand for payment in full?

10 Are there transaction fees and, if so, how much?