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TH E M R EP O RT | 45 O R I G I NAT I O N S E R V I C I N G A NA LY T I C S S E C O N DA R Y M A R K E T Keeping Ahead of the Latest in Industry Trends: idsDoc.com/more Many HELOC Borrows in for Shock as 10-year Draw Period Creeps Up Nearly one quarter aren't ready for increased payments. F rom now until 2018, many Home Equity Lines of Credit (HELOCs) borrowed during the housing bubble years of 2005 to 2008 will reach their 10-year end of draw period—and many of the borrowers will not be prepared for the pay- ment shock they will be facing, according to a recent survey from TD Bank. The bank's HELOC Reset Measure, which surveyed approximately 800 U.S. home - owners with HELOCs, found that nearly one-quarter (23 percent) of HELOC borrow- ers did not have a plan in place to handle increased payments once they reach their end of draw periods. The housing boom saw unprecedented numbers of HELOCs as homeowners looked for convenient ways to borrow in the midst of soaring home prices for major expenses such as college tuition, home improvements, and medical bills. "Many HELOCs allow borrowers to draw for 10 years and make interest- only pay - ments," said Mike Kinane, SVP, Home Equity, TD Bank. "When this draw period ends, borrowers are required to pay principal and interest, which may increase their monthly payments. It's important that HELOC borrow - ers plan ahead and review their contract to determine the best course of action based on their current and future financial situations." The survey found that many HELOC bor - rowers were unaware of the HELOC reset date despite communication from lenders. More than half of respondents (53 percent) who borrowed HELOCs between 2005 and 2008 said they were unaware of how the reset will affect their payments. Only 19 percent of survey respondents were aware that a HELOC reset meant that their payments will increase. Not only that, but misconceptions existed around the end of draw period—more than one-third (34 percent) of borrowers polled said they believe their pay - ments will be reduced after a HELOC reset. Not all borrowers with HELOCs were unprepared, however. More than one-quarter of survey respondents said they plan to refinance their HELOC into another loan, and nearly 70 percent of those borrowers said they plan to seek advice from their lenders. SERVICING THE LATEST