Pay interest on a HELOC if you don't use it?

[Megan Hirlehey]

I applied for several loans (HELOC and Home Equity) for a deal I'm trying to do, got approved for both types, narrowed it down, decided to go with the HELOC (interest-only minimum payments for the first 10 years) for the reuse-ability and what I thought was the fact that you only make interest payments on the amount used, similar to the way a credit card works.

Wellllllll I emailed to loan company and told them to withdraw my application because I don't want that (Home Equity) loan anymore, and the representative called me to find out why. So I explained to him that I want to be able to reuse it over and over, and I may not need the LOC immediately (if the deal falls through) so I don't want to be stuck making an extra (loan) payment if I don't have an income-generating property to subsidize it. So he proceeded to tell me for like 10 minutes (despite my objections) that the HELOC people are lying and I have to not only make an interest payment every month even if I have a zero balance, but since the interest rate is variable it is a lot more risky (I know he's right about that part). For example, if the HELOC is for $50k, and the interest rate is 4%, I will be making a $166.67 monthly payment whether I've maxed out the line or used nothing at all. Well, I called BS, so after about an hour of googling it, everything I could find (all general advice, no specific bank disclosures) was a recurring theme of "One benefit of a HELOC is that you only make payments if you use it." But I'm a newb, so there is VERY good chance I've gotten this all wrong. Have I?

Does anyone have a HELOC that requires you to make a monthly interest payment (or any other payment) even if you have not drawn against the loan at all?

P. S. I also emailed the loan provider asking the same question, but it's after business hours so I don't expect an answer for awhile

[Kimberly N.]

NO! I just got a HELOC from a local bank & I must say those guys were awesome! No payments at all until money is used & only have to use at least once per year to keep the loan active. IE: "you can borrow $100 dollars each year & immediately pay it back the next month & that's minimum requirement". Get a new bank would be my suggestion.