Home Equity Line of Credit from a Credit Union
When you need funds for home renovations, college tuition, a dream vacation, or another large expense, Bellco Federal Credit Union can help you secure a Home Equity Line of Credit (HELOC) with the lowest rates and fees.
Bellco FCU is a member-owned, not-for-profit federal credit union in Berks County, PA, that caters exclusively to members and offers a variety of affordable financial services. We provide a safe place to save and borrow at reasonable rates with exceptional customer service.
Membership in Bellco FCU is open to people who live, work, worship, or attend school in Berks County, PA. Simply open a Member Savings account with as little as $5, and set up your membership in a few simple steps.
Once you are a member, your immediate family members will be eligible to join too and can take advantage of our competitive rates for mortgages, personal loans, credit cards, and the many other services we offer.
Do You Qualify for a HELOC?
A Home Equity Line of Credit, commonly called a HELOC, enables you to borrow against the equity in your home (usually 80% to 90% of your home equity value), on an as-needed basis.
Similar to a credit card, you can repeatedly pay back and borrow from the line of credit whenever you need the money during what is called a “draw period,” (typically 5 or 10 years). When the draw period ends, you will enter a repayment period during which you will pay off the debt more aggressively.
Here are a few things you will typically need in order to qualify for a HELOC:
Income – Be prepared to show you have sufficient income to cover your mortgage payment and the new HELOC loan payment.
Strong Credit – Check your credit score. Lenders want to know you have a history of paying your debts on time.
Low Debt-to-Income Ratio – Lenders like to see a low debt-to-income ratio (DTI), or the ratio between your overall debts and your income.
Other Assets – Additional assets, such as a car, boat, rental property, or other investments, will make lenders feel more secure about lending you money.
How Much Can You Borrow?
Most lenders limit home equity borrowing to 80% to 90% Loan-to-Value (LTV). This is determined by dividing the balance owed on your mortgage (and any the other loans secured by your property) by the appraised value of your home.
Based on the following example, you may qualify for a Home Equity Line of Credit in the amount of $35,000 or less:
Home’s current appraised value: $200,000
80% of appraised value: $160,000 ($200,000 x 0.8)
Amount owed on current mortgage: $125,000
80% of home’s value minus amount owed: $35,000 ($160,000 - $125,000)
Bellco FCU would be pleased to help you evaluate all of your options and their pros and cons based on your personal situation. If you need a lump-sum of money right away, such as to pay for a dream vacation or an unexpected large expense, you may want to consider a traditional Home Equity Loan.
Get in touch with Bellco Federal Credit Union for a Home Equity Line of Credit with the lowest possible interest rates, low fees, and attentive, friendly service from start to finish! If you have questions, get in touch with our home lending specialists to discuss your options.