Many HELOC Borrowers Don't Know When Draw Period Ends
Many home equity line of credit borrowers don't know when their draw period ends, and many do not have plans in place to handle that transition, according to a study from TD Bank.
TD Bank reported that 27% of HELOC borrowers are unaware of their draw period end date, while 23% have not put a financial plan in place for when that time comes. But based on TD's data, many homeowners nationwide would be affected by a HELOC reset.
The study found that 43% of homeowners will feel the effects of a HELOC reset, and not many of them understand what the implications of a reset are. Just 19% of respondents understood that a reset would increase their monthly payment, as opposed to 34% who believe that their payments will drop.
The survey polled 812 people in late August and early September.