What is a HELOC?
A HELOC is a form of revolving credit where your home serves as collateral. They’re primarily used for major expenses such as home improvements, education, medical bills, etc.
Reasons to Apply for a HELOC
Gain access to your home’s equity
for major expenses
Keep your mortgage rate by not refinancing
Get a lower interest rate than credit cards or unsecured loans
Loan Details
| Loan Term | 15 years 5-year Draw Term followed by 10-year Repayment Term |
| Index | U.S. Prime Rate aka WSJ (Wall Street Journal) Prime Rate |
| Adjustment Periods | Daily |
| Annual Percentage Rate/Margin | WSJ Prime + 1% – LTV 80% or Less WSJ Prime + 2% – LTV 81% to 89% |
| Floor | 4.5% |
| Ceiling | 18% |
| Maximum Cap for Interest Rate Adjustment | None |
| Minimum Initial Advance | None |
| Minimum Draw | $100 |
| Payment Options | $100 or months’ accrued interest, whichever is greater |
| Closing Costs | Loan Origination Fee: $500.00 Flood Determination Fee: $14.00 Appraisal Fee: $550.00-$700.00 Title Fees: Varies by loan amount Mortgage Recording Fees: $174.00-$250.00 Return Item Fee: $27.00 Overdraft Item Fee: $27.00 Stop Payment Fee: $27.00 |
| Prepayment Penalty | None |
Tips when comparing HELOC options
- A HELOC is usually a variable interest rate loan, and it’s important to know which index is used to determine the interest rate, how often the value of the index changes, and how high it has risen in the past.
- Understand the potential fees associated with a HELOC such as: application fees, appraisal fees, closing costs, and other maintenance and/or transaction fees.
- Make a plan for how you will pay back the money you borrow.
- Ask questions, that’s what we’re here for!
