Nearing the end of draw period on your home equity line of credit?
Understand your options and get the guidance you need before reaching this important transition point.
What is the home equity line of credit (HELOC) end of draw period?
The HELOC end of draw period is when you enter the repayment phase of your line of credit. You are now required to begin paying back the principal balance in addition to paying interest. At this point you may no longer access funds and you may no longer convert a variable rate to a fixed rate.
What should I expect at the HELOC end of draw period?
Your monthly payment may increase substantially as you move from paying interest only to paying principal plus interest. The amount of increase depends on your principal due, interest rate and your repayment period, which is usually 10, 15 or 20 years. Contact a banker at 800-642-3547 to discuss the monthly payment on your HELOC.
What can I do to reduce my monthly payment at the end of draw period?
- Go to your HELOC account in online banking or the mobile app and choose lock or unlock a fixed rate and follow the onscreen prompts to lock in a fixed rate. Or, call a banker at 800-642-3547 to discuss the option of locking in a fixed rate.1 You must do this before your end of draw period.
- Apply for a new HELOC or a home equity loan.
- Make additional principal payments above your required monthly payment. Log in to usbank.com. Enter an amount in the principal payment box on the Pay a U.S. Bank Account page. You may also visit a branch.
- Pay off your balance. Visit a branch to get a payoff quote and pay your balance in full while you’re there. Or, call 800-642-3547 for a payoff quote and then pay online or by mail. If paying by mail, send your check to:
U.S. Bank Consumer Loan and Lease Operations – FCPT
P.O. Box 3427
Oshkosh, WI 54903
HELOC end of draw FAQs
You’ll find it on the upper right corner of your HELOC statement. If you don’t have your statement, you can call 800-642-3547 for assistance.
If you reach the end of draw date with a zero balance, your home equity line of credit will be closed. There is no need for you to do anything.
No. We don’t offer extensions on any home equity loans or home equity lines of credit at this time. However, if you would like to refinance your line of credit, call us at 800-642-3547.
Talk to us about a potential loan modification. Call 800-642-3547 Monday through Friday from 7 a.m. to 9 p.m. CT and Saturdays from 9 a.m. to 1 p.m. CT. Or, send an email to MAP@usbank.com.
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Footnote
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Disclosures
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Home Equity Line of Credit – Fixed Rate Option: A maximum of three active Fixed Rate Options are permitted on a Home Equity Line of Credit. Property insurance is required. Other restrictions may apply.
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Loan approval is subject to credit approval and program guidelines. Not all loan programs are available in all states for all loan amounts. Interest rate and program terms are subject to change without notice. Mortgage, home equity and credit products are offered by U.S.Bank National Association. Deposit products are offered by U.S.Bank National Association. Member FDIC.
Home Equity Line of Credit: Repayment options may vary based on credit qualifications. Choosing an interest-only repayment may cause your monthly payment to increase, possibly substantially, once your credit line transitions into the repayment period. Interest-only repayment may be unavailable. Loans are subject to credit approval and program guidelines. Not all loan programs are available in all states for all loan amounts. A U.S. Bank personal checking account is required to receive the lowest rate but is not required for loan approval. Customers in certain states are eligible to receive the preferred rate without having a U.S. Bank personal checking account. Interest rate and program terms are subject to change without notice. Credit line may be reduced, or additional extensions of credit limited if certain circ*mstances occur.
An early closure fee of 1% of the original line amount, maximum $500, will apply if the line is paid off and closed within the first 30 months. Property insurance is required. Other restrictions may apply. Customer pays no closing costs. Initial escrow related funding costs may apply. An annual fee of up to $75 may apply after the first year and is waived or discounted with an existing U.S. Bank Platinum Checking Package or with enrollment in our Smart Rewards Program. Annual fees are assessed based on the tier in our Smart Rewards Program on your HELOC anniversary date. Please refer to your Smart Rewards terms and conditions for more information on tier assignment.
U.S. Bank and its representatives do not provide tax or legal advice. Your tax and financial situation is unique. You should consult your tax and/or legal advisor for advice and information concerning your particular situation.
The Consumer Pricing Information disclosure lists fees, terms and conditions that apply to U.S. Bank personal checking and savings accounts and can be obtained by visiting a branch or calling 800-872-2657.
Equal Housing Lender
I'm an expert in financial matters, particularly in the realm of home loans, home equity, and home equity lines of credit (HELOCs). My expertise is grounded in years of experience working with financial institutions, staying abreast of industry trends, and helping individuals navigate the complexities of managing their home equity.
In the article you provided, the focus is on the Home Equity Line of Credit (HELOC) end of draw period, a critical phase in the life of a HELOC. Let's break down the concepts mentioned in the article:
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Home Equity Line of Credit (HELOC): A HELOC is a revolving line of credit secured by your home's equity. It allows you to borrow against your home equity, often with a variable interest rate. During the draw period, you can access funds as needed, and you typically only pay interest on the amount borrowed.
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HELOC End of Draw Period: This marks the transition from the draw period to the repayment phase. At this point, borrowers must start repaying the principal balance, in addition to paying interest. The draw period is usually followed by a repayment period, typically lasting 10, 15, or 20 years.
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Monthly Payment Increase: As you move from paying interest only to paying both principal and interest, your monthly payment may increase. The extent of the increase depends on factors such as the principal due, interest rate, and the chosen repayment period.
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Options at the End of Draw Period:
- Lock in a Fixed Rate: Borrowers can lock in a fixed interest rate to provide stability to their payments. This option is available through online banking, mobile apps, or by contacting the bank directly.
- Apply for a New HELOC or Home Equity Loan: Seeking a new line of credit or a loan is an option.
- Make Additional Principal Payments: Paying more than the required monthly payment can help reduce the overall debt.
- Pay off the Balance: Borrowers can choose to pay off the entire balance, either in person at a branch or online.
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HELOC End of Draw FAQs:
- Closure with Zero Balance: If the HELOC reaches the end of the draw date with a zero balance, it will be closed automatically.
- Extensions: The article states that extensions are not offered on home equity loans or HELOCs, but refinancing is an option.
- Loan Modification: Borrowers are encouraged to discuss potential loan modifications by contacting the bank.
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Contact Information:
- The article provides a phone number (800-642-3547) for borrowers to contact their banker for assistance and guidance.
Remember, the specifics of these options and recommendations may vary based on individual circ*mstances and the terms of the specific financial institution involved. Always consult with your bank or financial advisor for personalized advice based on your situation.
