A Home Equity Line of Credit (HELOC) typically offers a lower interest rate than a traditional fixed-rate mortgage, credit card, or other type of personal loan. Bellco Federal Credit Union caters exclusively to our members with competitively low rates and fees, and can help you calculate how much HELOC you can get.
How Much Can You Borrow?
A HELOC gives you access to a line of credit with a set limit, somewhat like a credit card. The amount of the loan is based on the equity you have built up in your home.
To figure out how much you could borrow, subtract the balance you owe on your mortgage (and any the other loans secured by your property) from the appraised value of your home. If, for example, your home has a value of $200,000 and you owe $120,000 on loans secured by your property, your equity is 40%, or $80,000.
Different lenders have different guidelines, but it is common to see HELOCs offered with a Loan-to-Value (LTV) between 80% and 90%. Using the home described above, which is worth $200,000 and has $120,000 still owed on the mortgage, the homeowner could qualify to borrow a maximum of $40,000 (80% LTV).
Depending on how much money you need and what you need it for, a HELOC may be an excellent option. It's generally a better choice than borrowing with your credit cards, because low HELOC interest rates offered by lenders could easily translate into thousands of dollars of savings compare to credit card interest.
If, however, you know you need a large sum of money right away, you may prefer a traditional Home Equity Loan which provides funds in a lump sum at a fixed rate for a fixed term, similar to refinancing your mortgage.
About Bellco Federal Credit Union
Originally known as the Bell Telephone Credit Union, Bellco FCU, a member-owned, not-for-profit federal credit union, opened its doors in 1938 and continues to provide unique financial products and services to individuals and small businesses in Berks County.
Like banks, credit unions accept deposits, make loans and provide a wide variety of other financial services. But as member-owned and cooperative institutions, 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 take advantage of competitive rates for mortgages, personal loans, credit cards, and the many other services we offer.
If you’re interested in how much you can get for a Home Equity Line of Credit (HELOC) in Berks County, PA, Bellco FCU can help you accomplish your goals! Contact us today.