What to Look for in a HELOC

Last updated: February 4, 2016

Know the Options

 Read the Credit Agreement Carefully

  • Examine the terms and conditions:
    • The APR
      • Note: APR for a HELOC is based on the interest rate alone. It will not reflect closing costs or other fees and charges. You must compare these costs separately among lenders.
    • The Costs and Fees of establishing a line of credit

HELOCs Typically Have Variable Interest Rates (Not Fixed)

  • Know how the variable rate is determined.

  • Know the cap on the variable rate.

  • Ask about rate options

    • Some lenders may allow you to convert from a variable rate to a fixed rate during the life of the HELOC. Other options may be available as well.

Ask for Specifics

  • Lenders are required to disclose the terms and costs of HELOCS.

This article is published on KansasMoney.gov. Find more information by contacting these state agencies: