What is a Home Equity Line of Credit (HELOC)?
A home equity line of credit, or HELOC, lets you borrow against your home value to access cash as needed. Interest rates on HELOCs tend to be lower than a credit card or personal loan because the loan is tied to your home.
How Does It Work?
A HELOC is basically a second mortgage that gives you access to the cash value of your home. Here's a simple example: If your home is worth $350K and you have paid off $200K already, then you have $150K of equity in your home. You could potentially borrow against the $150K equity you have in your home to fund other projects or expenses. Somewhat like a credit card, you can draw from a home equity line of credit and repay all or some of it monthly.
What Can I Use the Money For?
A HELOC can be used for most anything.
O Bee’s Home Equity Line of Credit (HELOC) is flexible enough to adapt to your every need. Whether you have one big purchase in mind or just appreciate the flexibility of having cash available, a line of credit is the smart way to take advantage of the equity you have in your home. Enjoy a low competitive variable rate, based on the Prime Rate. Rates are subject to change quarterly as the Prime Rate changes. (The Prime Rate is published daily in The Wall Street Journal-Western Edition.)
25 Year Repayment
O Bee Credit Union’s Home Equity Line of Credit features a 10-year Draw period and up to a 15-year Repayment period after that.
Draw Period: The draw period is the amount of time you may withdraw funds. During the draw period, you are only required to make monthly interest payments on the amount you have withdrawn. For example, if you were approved for $30,000 but only withdrew $5,000 of that. You would pay interest on the $5,000 only. Balances of less than $35 must be paid in full.
Repay Period: Assuming you do not wish to extend the draw period at the end of 10 years, the balance will automatically re-amortize and you will enter the repayment period for up to 15 years. You will be notified of a new monthly payment at this time. See Our Rates Here
Home Equity Loan Value
The value of your home is determined by either the current tax assessment or an appraised value. Consult with an O Bee Representative for further information (some restrictions may apply).
No Restriction on Advances
There are no restrictions on advances with your established credit limit. You decide when, where, how, and how much.
Variable Rate Feature
The interest rate will remain fixed for one year after the first draw. Thereafter, the Annual Percentage Rate (APR) can change quarterly on the first of January, April, July and October. The maximum Annual Percentage Rate that can apply during the Plan is 18.00% or the maximum rate allowed by applicable law, whichever is less. The Annual Percentage Rate cannot increase by more than two percentage points during any one year period. The Annual Percentage Rate will never be less than 3.00%.
“Lock In” Option
During the draw period of your Home Equity Line of Credit, you may “lock in” all or a portion of the outstanding balance to a “lock with a fixed interest rate and payment amount”. The minimum amount required for locking is $5,000 and the maximum term will not exceed 15 years. When you elect to lock in a portion of your outstanding balance, the available balance on your HELOC (Home Equity Line of Credit) loan will decrease accordingly. Those portions “locked in” will receive a separate loan suffix and will require a separate monthly principal and interest payment. There is no limit to the number of times you can choose the “lock in” feature.
Credit Line Increases Available
As your home increases in value, you may qualify for an even larger HELOC (upon approval of credit, fees may apply).
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