Home Equity Line of Credit| HELOC| Washington State

Your home holds memories...and value

You've worked hard to build the equity in your home. Now, put that equity to work for you! Whether you'd like to consolidate debt, tackle a home makeover, pay for college or cover another large expense, a Home Equity Line of Credit (HELOC) can provide you with a flexible source of funds.* Another option is a Cash-out Refinance. Either way, the application process is simple and the possibilities are endless!

Solarity also offers a bridge loan that lets you use your current home's equity as a down payment for a new home.

Or call for today's rates: 800.347.9222

Featured rate

Rates accurate as of November 22, 2024

APR as low as*

8.00%

Term

15 years

Payment per $1,000*

$9.56

View all consumer rates

Washington Home Equity Loans - Remodeling

Here's the scoop

Your HELOC functions like a credit card during the draw period as a revolving line of credit. You will be able to borrow and repay a certain sum. Take out what you need when you need it. You will only be charged interest on the amount you actually use.

Loan amount

$20,000 minimum loan amount, $300,000 maximum

Draw amount

The minimum draw amount is $500

Rate

The interest rate is variable, which means it can change over time

Timeframe

Includes a 10-year draw period with a 15-year repayment period

How to make a HELOC work for you

Borrow the amount you need, when you need it
Use it to pay off higher interest debt (also called debt consolidation)
Make interest-only payments for the first 10 years
Ideal for substantial recurring costs like college tuition
A source of funds for large, unplanned expenses
A convenient way to pay for repairs or a remodel that may add value to your home
Bonus: interest may be tax deductible for home improvements*

Compare home equity borrowing options

If you prefer the option to make periodic withdrawals, you might lean towards a HELOC. If you want to lock in your rate and make one payment each month instead of two, a Cash-out Refinance might be the way to go. Either way, we've got you covered.

Compare your options	HELOC	Cash-out Refinance
Fixed interest rate for a set payment amount each month
Variable rate, meaning payment amounts can fluctuate over time
One-time, lump-sum
Make withdrawals as you need them
Replaces your current mortgage with a new home loan
Interest may be tax-deductible*

Both a HELOC and a Cash-out Home Refinance let you:

Tap into the equity in your home
Use the funds to pay for whatever you want

Apply for a HELOC Learn more about refinance

Ready to explore your home equity borrowing options?

We can help you determine the best way to borrow against the equity in your home and see how much you might be able to borrow. Get in touch with us to get started:

Online

It takes less than 10 minutes to apply online. Submit your application and we'll follow up with you to discuss your situation.

Call

Ready to talk to someone right now? Our team members are ready to talk to you, too! Call 1.800.347.9222.

Come say hi

Stop by a branch to say hello and get to know your local financial experts.

How to calculate your home equity

Determining your home equity is a straightforward process. Simply subtract the outstanding mortgage balance from the current market value of your property. For instance, if your home is valued at $750,000 and you still owe $400,000 on your mortgage, your home equity would be $350,000.

Can I use my HELOC money for anything?

A major benefit of a HELOC is its versatility, allowing it to be used for various purposes. It's particularly well-suited for long-term expenses like home renovations, medical bills, or college tuition, especially when these projects occur in stages. HELOCs also help streamline debt repayment into a single, more manageable monthly

What happens to a HELOC after 10 years?

A typical HELOC draw period lasts around 10 years, although it can vary. During this phase, you make minimum interest payments, with no obligation to reduce the principal balance. Payments are relatively low, varying based on your borrowed amount, similar to credit card payments. You might have the option to renew the line of credit at the end of the draw period, or you'll enter the repayment phase. In the repayment phase, you can't access more funds, and you must start repaying the entire borrowed amount with interest. Monthly payments will significantly increase, especially if you haven't paid down the principal during the draw period.

Alternatives to a HELOC loan

When a home equity loan isn't a suitable option, there are alternative ways to access cash. One option is a personal loan, which is relatively easier to obtain, and the funds are typically accessible within a few days, although the loan amount may be limited compared to a home equity loan. Another alternative is to consider using credit cards, but it's essential to be mindful of the potentially high interest rates associated with them. If opting for credit cards, it's advisable to explore cards offering a 0 percent introductory rate and ensure you pay off the balance in full before the introductory period expires. Additionally, a cash-out refinance is an option where you take out a completely new mortgage on your home for an amount exceeding your current property debt, providing you with a lump sum of cash.

Is HELOC a second mortgage?

Yes, a Home Equity Line of Credit (HELOC) is classified as a second mortgage. It functions as a loan that leverages the equity in your home as security, similar to a conventional mortgage. However, unlike a typical mortgage, a HELOC operates as a flexible revolving line of credit, enabling you to borrow and repay funds repeatedly within a set credit limit. Essentially, a second mortgage denotes an extra home loan secured by a property already encumbered by an existing mortgage.

Can a HELOC be paid off early?

You have the flexibility to pay off your Home Equity Line of Credit (HELOC) balance at any time. HELOCs usually come with a specific term, and when that term concludes, you are required to clear any remaining balance. If you choose to pay off your HELOC balance early, your lender might offer you the option to either close the credit line or keep it open for potential future use. It's important to note that certain HELOCs, categorized as "high-cost mortgages," are subject to federal regulations, which include restrictions on prepayment penalties. These penalties, if applicable, can't be charged more than 36 months after opening the account or exceed 2% of the prepaid amount. Keep in mind that if you pay off your HELOC early and close the account within a specific timeframe, your lender may impose an early termination fee as a way to recover potential lost interest revenue. This fee can vary, either as a percentage of your credit line or a flat fee.

Can I open a HELOC and not use it?

A Home Equity Line of Credit (HELOC) offers the flexibility to access funds during a specified period, and you don't have to use the full borrowing limit if you don't need it all at once. Nevertheless, it's essential to understand that some lenders may impose fees if you choose not to use your HELOC after opening it. These fees might include inactivity fees or charges for early closure if you decide you no longer need the HELOC. It's crucial to be aware of these potential costs, which should be clearly outlined in your HELOC agreement. Additionally, keep in mind that there can be application fees and closing costs associated with setting up a HELOC, so opening one solely as a precautionary measure may not be cost-effective. Instead, it might be wiser to consider building an emergency fund for specific needs and understanding that HELOCs typically have a draw period of five to ten years, after which the repayment phase begins.

Does a HELOC damage your credit?

When you decide to open a home equity loan, like a Home Equity Line of Credit (HELOC), it's essential to understand its potential effects on your credit score. Your credit score comprises various factors, including your credit utilization, which reflects how much of your available credit you're using.

Adding a significant home equity loan to your credit report can initially have a negative impact on your credit score, potentially making it more challenging to qualify for other loans in the short term. For example, obtaining a home equity loan just before applying for an auto loan might result in less favorable terms for your car financing.

Over the long term, having a home equity loan and consistently making timely monthly payments can potentially have a positive influence on your credit score. It's crucial to be aware of the temporary dip you might experience in the beginning.

Regarding your credit score, a HELOC shares similarities with a credit card. It can cause a minor decrease when you apply for one but could have a more substantial impact if you make late or missed payments. As additional debt, it can harm your score, but it can also enhance it by increasing your total available credit.

Ultimately, how a HELOC affects your credit score depends on how responsibly you manage the account.

What happens to HELOC if the market crashes?

The limit of your Home Equity Line of Credit (HELOC) is directly linked to your home's appraised value at the time of approval. Should your home's value decline due to market shifts, it can affect the equity accessible to you. When you apply for a HELOC, your lender takes into account your home's value and assesses your capacity to make payments throughout the loan term. If there are substantial changes in your financial situation since you secured the loan, your lender has the authority to reduce or freeze your HELOC. If you disagree with your lender's decision, you can appeal, often requiring an updated home appraisal. However, approval isn't guaranteed, and you'll cover appraisal fees. If your lender doesn't restore your HELOC, you can explore options with other lenders, potentially paying off your original line of credit with a new HELOC.

Key takeaways:

A HELOC itself doesn't inherently affect your credit score; its impact hinges on your management of it.
HELOC applications involve a hard credit inquiry, temporarily lowering your credit score, but this effect is minimal if you haven't applied for other credit recently.
The debt balance on your HELOC can potentially lower your credit score, particularly if it significantly increases your credit utilization.
Using HELOC funds to pay off high-interest debt, provided you maintain zero balances going forward, can improve your credit score.
When you apply for a HELOC, the lender performs a hard credit inquiry, which may cause a slight drop in your score, but this impact diminishes over time as you manage the account responsibly.

Other common questions about home equity loans

What does HELOC stand for?

“HELOC” is short for home equity line of credit – a type of second mortgage. You can take out money from the line of credit when you need it and pay it back all at once or over time. A HELOC has a borrowing limit just like a credit card, but unlike a credit card, a HELOC is established for a set amount of time called a “draw period”. Solarity's draw period is 10 years. During that draw period, you’re typically required to make interest-only payments each month on any outstanding balance.

What is a home equity loan?

A home equity loan is often referred to as a second mortgage, and is a common way for homeowners to tap into the equity in their home. Equity is the difference between what you owe on a home and what the home is worth, so if you owe $100,000 and your home is worth $250,000, you have $150,000 in equity. A home equity loan is a way to access a portion of that $150,000 in equity. A home equity line of credit (or “HELOC”) is a popular form of home equity loan. You can apply for one here.

What's the difference between a home equity loan and a HELOC?

Home equity loans and home equity lines of credit are similar, but there are a few key differences between the two. With both types, you will be able to borrow against the equity of your home to utilize the loan amount for other areas of improvement.

A home equity loan is often called a second mortgage and is a debt secured by borrowing against your home. Typically, you will be able to request up to 80% of the equity that you put into your home. Home equity loans come in a lump sum payment with a fixed interest rate and a term of 10 to 15 years, depending on the agreed-upon terms. Usually, the interest rate will be dependent on your credit, as well as a few other factors.

A home equity line of credit (HELOC) is more flexible and allows you to withdraw funds up to a predetermined amount as you need them rather than as a lump sum. It works more like a credit card and has a variable interest rate, which means the rate can change over time. HELOCs have a set “draw period”, usually 10 years. During the draw period, you can take withdrawals as often as you like, making payments on the interest only, with no obligation to reduce the principal balance. At the end of the draw period, you'll enter the repayment period. You won’t be able to withdraw additional funds, and your monthly payments will include both principal and interest. By choosing this route, you will only pay interest on the money you borrow, rather than paying interest on a lump sum. If you’re unsure how much money you’re going to end up using, this is usually a better choice.

What is the process like for a home equity line of credit (HELOC)?

It is easy! You fill out an application, online or over the phone, and then submit the following:

Proof of income
Proof of homeowner’s insurance
Most recent mortgage statement

Our team will connect with you to verify your identity and information. Our experts will then briefly go over the loan process and learn your goals to ensure you’re borrowing what you need. Once we have that, we send your application to underwriting. This is a team that closely looks at your information. During underwriting, the team utilizes an online appraisal tool to estimate the value of your home. If this tool has the information it needs, sometimes you can get same-day approval for your HELOC! If your home’s information is unavailable within the tool, we will have to schedule a traditional appraisal, which can make the process take a little longer. Most HELOCs close in less than two weeks. Apply online to get started!

What can I use my home equity line of credit (HELOC) for?

Anything! Many members use the equity in their home to pay off higher interest debt as well as for home renovations, college tuition, vacations or unexpected expenses. Our team is here to help you explore if a HELOC is the right fit for you. Apply online to get started.

How much does it cost to get a home equity line of credit (HELOC)?

It varies, but typically a HELOC closing costs fall under $900 – no matter the amount borrowed. The cost could be higher if we have to order an in-person appraisal, for a professional to visit your home.

Some examples of items included in HELOC closing costs include:

Application fee - Application fees are standard when applying for any assistance, whether that be a home equity or conventional loan.
Appraisal fee - An appraisal is required when you apply for any home equity or HELOC loan program because the amount that you are awarded is based partially on the amount of money that your house is worth. The lender is going to want an accurate and recent estimate to base their calculations on, so it’s important to plan on having an appraisal done on your home.
Credit report fee - Depending on the lender, you may be required to pay a fee for running a credit report.
Title search fee - A title search is a search that is run to make sure that you are the owner of your home before awarding a loan to the borrower.
Attorney and notary fees - If you need a lawyer's assistance in drawing up any paperwork or need anything notarized, make sure to factor in some extra funds.

These are the customary charges that are standard across all home equity loans, but it may be useful to put some extra money aside for any unexpected costs that may occur.

It doesn’t cost anything to apply or have an initial conversation with us to find out if a HELOC is right for you. Apply online to get started.

How long does it take to get a home equity line of credit (HELOC)?

It depends on a variety of factors, but in some cases, you can get approved the same day! Most of our HELOCs close in less than two weeks. The best way to ensure that the process moves quickly is to have all the information we request submitted at the time of your application. This includes proof of income, proof of homeowner’s insurance and your most recent mortgage statement. We can get working on your application right away. Apply online to get started!

What do I need to apply for a home equity line of credit (HELOC)?

In addition to filling out an application, you will be asked to submit the following:

Proof of income
Proof of homeowner’s insurance
Most recent mortgage statement

Our team will connect with you to verify your identity and information. Our experts will then briefly go over the HELOC process and learn your goals to ensure you’re borrowing what you need. Apply online to get started.

Helpful articles and information

How does a home equity line of credit work?

A home equity line of credit (HELOC) is a type of loan that allows you to borrow against the equity in your home.

What is home equity and how can it be accessed?

Home equity is a home’s value after subtracting the mortgage from the market value. It can be accessed through a home equity loan, HELOC or cash-out refinance.

Cash-out Refinance vs. HELOC: Which is right for you?

For many Americans, the equity we have in our home – the difference between what we owe on it and what it’s worth – is our biggest asset. But how can we access that wealt...

Home equity product is available in Washington, Oregon and Idaho. The minimum loan amount is $20,000. The Annual Percentage Rate (APR) is a variable rate. Initial rate is based on loan amount, loan to value and credit history. Not all applicants will qualify for the lowest rate. Your qualifying rate may adjust monthly and is based on the highest Prime Rate as published in The Wall Street Journal as of the date of any rate adjustment, plus or minus a margin. Under no circumstances will your annual percentage rate exceed 18.000% per annum. Property insurance required. Fees at account opening include a $175 processing fee and $150 document preparation fee. Closing costs range from $700-$2,200 depending on appraisal requirements. Offer subject to credit approval, which includes verification of application information and receipt of collateral documents. Not all applicants will qualify. Rates, terms, and conditions subject to change. Consult your tax advisor with any questions regarding tax advantages or deductibility of interest.

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