Home equity line of credit (HELOC)

To qualify for a Home Equity Line of Credit (HELOC), you’ll need to have equity in your home, which means the value of your home exceeds what you owe on your mortgage. We will also consider factors like your credit score, income, and overall financial situation. The more equity you have and the better your financial standing, the higher your chances of qualifying.

You can use a HELOC for various purposes, such as home improvements, consolidating debt, covering education costs, or even funding large purchases like a car. Since it’s secured by your home, it typically offers lower interest rates compared to other forms of credit. However, it’s important to use it responsibly to avoid putting your home at risk.

The repayment process for a HELOC typically involves making interest-only payments during the draw period, which is usually the first 5-10 years. After the draw period, you’ll enter the repayment period, where you’ll start repaying both the principal and interest. You can pay off the balance early without penalties, and the more you pay, the more available credit you’ll have.

If you can’t make your HELOC payments, you may face late fees, increased interest charges, and your credit score could be negatively affected. In extreme cases, BCU Financial could initiate foreclosure proceedings, as your home is used as collateral. It’s important to contact us if you’re struggling to make payments, and we might be able to offer options or work out a payment plan.

A HELOC offers flexible access to funds up to a set limit, and you only pay interest on the amount you use. It’s a revolving line of credit, meaning as you repay what you borrow, the funds become available again. In contrast, a regular loan gives you a lump sum to be repaid over a fixed term with fixed monthly payments, and you pay interest on the full loan amount.

BCU Financial may charge certain fees for HELOCs, such as NSF loan payment, late payment charges and loan amendment, depending on the agreed terms. It’s a good idea to review your HELOC agreement and speak with one of our representatives to understand any potential fees associated with your specific line of credit.