Ways to Finance Home Improvements

If the time has come to make home improvements, finding ways to finance them is as easy as a conversation with a financial professional at Bellco Federal Credit Union. We offer secured and unsecured financial products and can evaluate your situation and make suggestions accordingly. Competitive rates, outstanding customer service, and a community focus mark our work.

As a member-owned, not-for-profit federal credit union, Bellco FCU focuses on the community of Berks County, PA. You’ll find many options here for your home improvement financing – in particular a Home Equity Line of Credit or Home Equity Loan.

Comparison of Home Equity Borrowing

Using the equity you have established in your home over the course of paying down your mortgage is an excellent option for home improvements. This type of borrowing allows you to re-invest back into your home. 

HELOC (Home Equity Line of Credit)

A HELOC works somewhat like a credit card and is made available to you for a limited time period (typically 5 or 10 years). During what is called a “draw period,” you can withdraw funds from the line of credit whenever you need them. As you pay off the principal, your credit revolves, and you can use the line again and again for the duration of the draw period. As you spend and repay, you can spend again, up to the limit on the line of credit. 

A repayment period identifies when the HELOC must be repaid. This period generally lasts ten years, and you’ll make a fixed monthly payment that includes principal and interest to pay back the loan.

The borrowing limit of your credit line will depend on a few factors. The home’s appraised value, the existing mortgage balance, and any other secondary loan on the property. You can generally borrow up to 80 or 90% of the equity, and the interest rate will depend on factors like your credit rating, income, and the length of the loan. 

Home Equity Loan

A home equity loan is basically a second mortgage. It’s secured by the equity in your home and is disbursed in a lump sum rather than as a line of credit. The term and rate will be fixed. You’ll repay this amount monthly until the loan has been repaid. 

When you anticipate large home improvement expenses, a home equity loan can provide you with a set budget and ready funds.

Becoming a Bellco FCU Member

When you are a Bellco Federal Credit Union member, you can apply loans to finance your home improvement costs. We provide great rates and service. Those who don’t belong to the credit union but who live, work, worship or attend school in Berks County, PA can become members. You’ll also qualify if you have a parent, sibling, or grandparent who is a current credit union member. 

Opening a Member Savings account with a small deposit will start the short process of becoming a member, and once complete, you will remain a member for life. 

To learn more about making the most of your home’s equity for home improvements or other loans we offer to finance your expenses, reach out to Bellco FCU online, via phone, or at one of our local branches.