Understanding Home Equity Lines of Credit

The equity earned over the course of your homeownership can come in handy when you need access to funds. Instead of taking out high interest, unsecured credit cards, consider a HELOC, or Home Equity Line of Credit. Understanding Home Equity Lines of Credit will allow you to take full advantage of the equity of your home in a revolving manner similar to a credit card rather than as a lump sum borrowed from your home equity. 

The right place for you to go for your HELOC might just be Bellco Federal Credit Union. We are owned by our members and serve the community rather than shareholders. Established in 1938 as Bell Telephone Credit Union, Bellco FCU offers a variety of financial products and services, including HELOCs. 

What to Expect from a HELOC (Home Equity Line of Credit)

A HELOC, or Home Equity Line of Credit, comes with lower interest rates than credit cards and other unsecured financing options. The funds are ultimately backed by the equity in your home. 

A HELOC has a period for borrowing and a period for repayment. During the period that allows you to spend, funds can be repaid repeatedly and you can continue borrowing, just as a credit card. This period usually continues for a set period of time, either five or ten years. When the borrowing period ends, the repayment period will start. By the end of this period, the HELOC should be completely repaid. 

Using this line of credit works best when you need smaller amounts spread over a period of time rather than one large sum. Consider these key features of your HELOC:

  • Use only what you need, when you need it

  • Owe interest only on what’s borrowed, not on the entire credit line

  • Take advantage of your home’s equity for security

  • Use the funds for whatever expenses you choose

  • Enjoy lower rates than those encountered with other financial products

  • Bellco FCU makes local decisions 

  • Experience professional, courteous service

  • Withdraw funds in many ways ranging from HELOC checks, the local Bellco FCU branch, and online or via telephone

Alternative Financial Products

When your plans call for a large, one-time sum, a more conventional home equity loan might be more appropriate than a HELOC. You’ll be taking out a second mortgage with potentially higher rates than your first mortgage, but you’ll receive the funds all at once and repay it as you would any mortgage. 

Alternatively, you could choose to refinance your primary mortgage, withdrawing all or part of the equity in a lump sum. This choice will enable you to make one monthly payment rather than two. 

The friendly professionals at Bellco Federal Credit Union will provide you with any information you need about any or all of these home borrowing options. 

Become a Member Today

Bellco FCU offers membership to people who live, work, worship, or attend school in Berks County. Open a Member Savings account with as little as $5, and establish your membership in a few simple steps. This is not a fee; it is a share in the credit union and provides you with voting rights and a say in any decisions we make. Even if you leave your current employer, retire, or move away, you can remain a Bellco FCU member for life. 

Understanding Home Equity Lines of Credit will likely lead you to Bellco Federal Credit Union.  If you are already a member, you can apply online for a home equity line of credit. If not, join today to take advantage of our many products and services!