Sep 09, 2022 / Home Equity

How Does a HELOC Work?

You’ve probably heard all about a home equity line of credit (HELOC). It’s a revolving line of credit that lets you use as much or as little of your available HELOC funds as you want, for whatever you want, whenever you need it. It’s a great way to pay for home repairs and renovations, big events and projects, or even take a dream vacation. But do you know how a HELOC works in practice? Here’s everything you need to know about applying for, using, and repaying a HELOC.

Application and Approval

Applying for a HELOC is as easy as going online, clicking a button, and filling out a quick 2-minute form. While you’re there, you can check current interest rates, calculate a potential HELOC amount, and determine how much you can borrow, depending on the equity in your home. There are no annual fees or origination costs* so you can expect a quick answer once your application is complete. Of course, if you prefer to apply in person, you can always visit a Utah First branch near you.

Transfer and Use Funds

Once your HELOC has been approved and funded, your available funds will be conveniently displayed in Digital Banking. You won’t pay interest until you actually use your HELOC funds, but when you’re ready, there are a few easy ways to access your cash.

The first (and probably the easiest) is to transfer HELOC funds to your checking account using Digital Banking. Just enter the amount you want to transfer and your funds will immediately appear in your checking account, ready to be used for your next project. You can also request a HELOC card that will withdraw funds directly from your HELOC account.

Repaying Funds

Repaying your HELOC is a lot like repaying a credit card. You’ll have a loan limit, and you can use and repay funds on a revolving basis. Your HELOC will have a draw period, during which you’re only required to make interest payments (you can always repay more). After the draw period ends, you’ll have a set amount of time to pay off the principal amount of your loan, plus interest (your loan interest may be eligible for tax deduction).

One nice (and unique) feature of a Utah First HELOC is that you can lock in your interest rate at any time, changing it from a variable rate to a fixed rate, so you don’t have to worry about market fluctuations or changes to your payment. As far as actually paying your loan, it couldn’t be easier. Just use Digital Banking to transfer funds from your Utah First savings or checking account to your HELOC loan amount.

A HELOC is one of the easiest, most convenient, and least expensive ways to access funds for just about anything. Now that you know all about applying for, using, and repaying a HELOC, check out our great HELOC rates or visit a Utah First branch to see if a HELOC is right for your situation.


*HELOCs up to $500,000 loan amounts are not subject to fees or additional costs. Loans larger than $500,000 are subject to a recapture fee, equal to the origination costs if the loan is paid off and closed within 48 months of the original funding date.