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Home Equity HELOCs

What Is a HELOC Modification Agreement?

If you’re struggling to afford your home equity line of credit (HELOC) payments, a HELOC modification can help you avoid default and foreclosure. It can result in a lower monthly payment, allowing you to remain in good standing.

Read below to understand how HELOC loan modification works and how to request it.

Who requests a HELOC modification?

Only the borrower can request a HELOC modification—not the lender.

If multiple borrowers are on the account, they must all agree to the modification request.

In what situations might a borrower request a HELOC modification?

Many borrowers ask for HELOC modification if they’re struggling to pay. You might ask for a HELOC modification in the following situations: 

Consider a HELOC modification request when you’re…
Dealing with divorce or death of spouse or co-borrower
Experiencing illness
Navigating job loss or income reduction
Unable to make payments
Unable to qualify for HELOC refinance

Major life changes

Certain events can reduce your cash flow, making it a challenge to pay off your HELOC. In the following cases, HELOC modification can be the best solution: 

Divorce or death of a spouse or co-borrower

Getting divorced or losing your spouse can make paying back your HELOC harder, in particular if they were the breadwinner or you have high child support or alimony payments.


If you become seriously ill or disabled, you may be unable to work. This could make affording your mortgage, HELOC payment, and other expenses more challenging. 

Job loss or income reduction

Some lenders may approve a HELOC modification if your income has decreased since you opened the line of credit. You may qualify for HELOC modification if you have lost your job, been furloughed, or had your hours cut. 

Unable to make payments in HELOC repayment period

If you have a variable rate, the HELOC interest rate may increase when overall market rates increase. 

The large spike in monthly payments can be a shock. This is a common reason homeowners request a modification.

Unable to qualify for HELOC refinance

A HELOC refinance is another way to change your monthly payment and interest rate. But you may not qualify to refinance your HELOC—for instance, if you owe more than the home is worth. 

What can I change if I request a HELOC modification?

Most borrowers ask for a lower interest rate, resulting in a lower monthly payment. 

You may also request a longer repayment term, which will decrease your monthly payments. What you can ask for depends on your lender’s policies. 

Is there anything I can’t change with a HELOC modification?

In general, your HELOC credit limit will stay the same when you do a modification. 

If you have a variable rate, it will often remain variable. 

Pros and cons of a HELOC modification agreement


  • Avoid default and foreclosure.

  • Avoid taking out more loans to cover your HELOC payments.

  • Many lenders don’t charge fees for modification.


  • May hurt your credit score if the lender reports it to credit bureaus.

  • Can take up to 30 days with certain lenders.

  • Lender can choose not to issue a modification.

Am I eligible for HELOC modification?

Every lender has its own eligibility requirements for HELOC modification. 

For example, Bank of America requires that you’ve had your HELOC for at least nine months and made at least six payments. You can’t have received a previous HELOC modification in the last 12 months or two modifications within the last five years.

Firefighters First Credit Union states that you must not have had any loans more than 30 days delinquent in the last year.

Contact your lender to find out about its HELOC modification eligibility requirements. 

How long does HELOC modification take?

The time it takes to complete a HELOC modification can vary depending on the lender

Bank of America says it can take up to 30 days to approve the modification request. 

Firefighters First Credit Union says it takes five to seven days to process.

If you’re worried about missing payments and want to pursue a HELOC modification, contact your lender as soon as possible.

What should I do next if I want to pursue HELOC modification?

If you’re interested in HELOC modification, contact your lender. It may ask you to complete an online form, or it may handle your request over the phone. 

Make sure to have the following information handy:

  • Loan number
  • Current monthly income
  • Current monthly expenses
  • Why you’re asking for a modification

How will I know whether my HELOC modification request is approved?

After you apply for HELOC modification, the lender may contact you with more questions. If your request is approved, you will receive documents to sign, finalizing the modification. 

Some lenders may institute a trial period in which you must make several months of on-time payments at the new, lower amount. Once you complete the trial period, the loan modification becomes permanent. 

Alternatives to HELOC modification

If you don’t qualify for HELOC modification, consider the following options instead:

HELOC refinance 

If you still have good credit or enough equity in your home, you may qualify to refinance your HELOC. If you are eligible for a lower interest rate or longer term, you can lower your monthly payment and free up cash for other expenses.

You can start by contacting your lender about refinancing. 

If it won’t let you refinance your HELOC, you can apply with other lenders. It’s always wise to shop around for the best rates and terms.

Personal loan

A personal loan can help you if you struggle to make ends meet. You can use a personal loan for many reasons, including debt consolidation, home repairs, and medical bills. Remember: Acquiring a new monthly debt payment will increase your monthly expenses.

Interest rates for personal loans vary depending on your credit score, income, and loan amount. Be sure to compare rates with several lenders to find the lowest one.

Find out more about how HELOC repayment works.