Home Equity Loans
A home equity loan allows you to borrow money, using your home's equity as collateral. Collateral is defined as a property that you pledge as a guarantee that you will repay a debt. Equity is the difference between how much the home is worth and how much you owe on the mortgage.
Why should I get a Home Equity Loan?
A home equity loan might be best if you plan to use the money for a one-time occasion such as a home repair, purchasing a car, paying for your daughter’s wedding, or consolidating debt. Why? Because home equity loans are disbursed in one lump sum.
Also, the interest rate on our Smart Choice Home Equity Loan is fixed and so are the monthly payments. You pay principal and interest every month for the life of the loan.
Why should I get a Home Equity Line-of-Credit?
If you plan to use the money periodically and not all at once, you may want to obtain a home equity line-of-credit. For example, if you’re doing a remodeling project and the contractor will be paid in several installments, or you’ll be making tuition payments at the beginning of each semester. A home equity line-of-credit is a credit line much like a credit card, giving you the flexibility to borrow what you need when you need it.
The interest rate with a home equity line-of-credit (HELOC) is variable and will change over time.
FedChoice offers the Smart Choice Home Equity Loan and two Home Equity Line-of-Credit choices:
Home Equity Line-of-Credit - Classic
If you plan to use the money periodically and not all at once, you may want to obtain a home equity line-of-credit.
- Competitive variable interest rates.‡
- Lines-of-Credit are available up to $500,000.
- Lines are available up to 90% CLTV.+
- Interest may be tax deductible!^
Home Equity Line-of-Credit - Gold
A home equity line-of-credit is a credit line much like a credit card, giving you the flexibility to borrow what you need when you need it.
- Our Home Equity Gold line gives you the option to pay Interest Only for the first 10 years!
- Lines-of-Credit are available up to $250,000.
- Lines are available up to 90% CLTV.+
- Interest may be tax deductible!^
The Consumer Financial Protection Bureau has published an informative brochure to help you understand the differences between home equity loans and home equity lines-of-credit so that you may determine which product will best suit your needs. Click here.
HOME MORTGAGE DISCLOSURE ACT NOTICE
The Home Mortgage Disclosure Act (HMDA) requires that we make data available for review that we are required to collect about our residential mortgage lending. The data includes geographic distribution of loans and applications; pricing, ethnicity, race, sex, and income of applicants and borrowers; and information about loan approvals and denials. Inquire at this office regarding the locations where HMDA data may be reviewed. To receive a copy of this data, please send a written request to FedChoice Federal Credit Union, 10001 Willowdale Road, Lanham, MD 20706, Attention: Lending Services Director.
* Rate for the Gold Home Equity Line-of-Credit is based on The Wall Street Journal Prime. Rate adjusted monthly. The Gold Home Equity Line-of-Credit is subject to a floor of 3.50% APR.
‡ Variable rate is based on The Wall Street Journal Prime. Rate adjusted monthly.
† The Smart Choice Home Equity Loan and the HELOC must be secured by the owner-occupied primary residence. Homeowner’s insurance is required. All loans are subject to credit approval.
^ Consult with your tax advisor regarding the deductibility of interest and charges. The interest on the portion of the loan that is greater than the fair market value of the dwelling is not tax deductible for Federal income tax purposes. Other conditions apply.
+ CLTV = Combined Loan to Value.