What is a HELOC?
What is a HELOC? It is a Home Equity Line of Credit that allows homeowners to borrow against the equity in their homes on an as-needed basis. By becoming a member of Bellco FCU in Berks County, PA, you can qualify for the best interest rates, low fees, and attentive, friendly service from start to finish!
Bellco FCU is a member-owned, not-for-profit federal credit union that caters exclusively to members and their needs and offers a variety of affordable financial services. Our trusted and experienced professionals genuinely listen and offer solutions with the compassion of a true neighbor.
About Home Equity Lines of Credit
A Home Equity Line of Credit can provide you with a certain amount of money, usually between 80-90% of your home equity value. The 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 it again and again for the duration of the draw period.
How Much Can You Borrow?
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 is valued at $200,000 and you owe $140,000 on loans secured by your property, your equity is 30%, or $60,000. At 80% Loan-to-Value (LTV), minus the amount currently owed, you could qualify to borrow a maximum of $20,000.
Do You Qualify for a HELOC?
Requirements differ from lender to lender, but 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.
Join Bellco FCU Today
Membership in Bellco FCU is open to individuals 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 also be eligible to join and take advantage of competitive rates for mortgages, personal loans, credit cards, and the many other services we offer.
To find out more about the HELOC and learn what the pros and cons may be based on your personal situation, contact Bellco FCU today. We have the tools, information, and expertise to help you make the right decisions.