What Are HELOCs and Home Equity Loans?

What are HELOCs and Home Equity Loans, and which one may better suit your needs? Bellco Federal Credit Union can help. We provide a safe place for members to save and borrow at reasonable rates with exceptional customer service from start to finish.

Bellco FCU is a member-owned, not-for-profit federal credit union that caters exclusively to you and your needs and offers a variety of affordable financial services. We offer competitively low rates for home purchase, refinance, or construction, and have a number of home loan programs available.

What is a HELOC?

A HELOC is a revolving line of credit that is secured with the equity in your home. It has a draw period and a repayment period.

During the draw period (typically 5 or 10 years), you can withdraw funds from the credit line up to your credit limit. Borrow as much as you need, when you need it, and make a minimum payment on the amount borrowed.

If you partially or completely repay the line of credit during the draw period, you may make additional withdrawals. However, even if you do not use all of the available funds, you will not be able to make withdrawals once the draw period closes.

During the repayment period, you will be required to make monthly principal and interest payments until the entire loan has been repaid (typically up to 10 years).

To determine the amount of your HELOC, your lender will consider the estimated appraised value of your home, the amount of your current mortgage, and any other loans secured by your property. 

What is a Home Equity Loan?

The traditional Home Equity Loan is a second mortgage secured by the equity in your home. It provides funds to you in a lump sum at a fixed rate for a fixed term (up to 15 years). It is similar to refinancing your mortgage but without many of the closing costs. The loan is repaid in budget-friendly fixed monthly payments, just like your original mortgage. 

A Home Equity Loan from Bellco FCU offers a variety of benefits:

  • Secured by the equity in your home

  • Fixed interest rate

  • Funds are paid to you in one lump sum 

  • Monthly payments remain the same over the life of the loan

  • No restrictions on use of funds

  • Useful for emergency funds, home remodeling, debt consolidation, unexpected major expenses like a large medical expense or a wedding

  • Local, Pennsylvania decision-making and processing 

Join Bellco FCU Today

If you are already a member of Bellco FCU, you can apply for a HELOC online. If you are not yet a member, but live, work, worship, or attend school in Berks County, consider opening a primary savings account with as little as $5, and become a member today!

When you join Bellco FCU, you will remain a member for the rest of your life, even if you change jobs, retire, or move out of Berks County. You also become a partial owner and have an equal voice in how your credit union is run, no matter how much money you have on deposit. 

Learn more about HELOCs and Home Equity Loans, and discover what other financing options are available from Bellco FCU.  We’re eager to help you accomplish your goals!