Home Equity Line of Credit. A HELOC is a new loan with a revolving line of credit feature. You borrow what you need within the loan limits. The flexibility of a HELOC can be useful for occasional cash needs when running a business. HELOCs have a withdrawal period – often up to 10 years, after which the credit line closes and you have to repay the principal and interest. So it doesn’t permanently increase the size of your mortgage. Interest rates and costs exceed that of refinancing. Another downside is that if things go bad you will not have the protection of Arizona’s anti-deficiency laws. That means if you default you are personally liable for the loan balance. Note that some of the major banks discontinued their HELOC products due to Covid and not all have reinstated those programs. Next in Part 4: Reverse Mortgages.