Home Equity Line of Credit as Low As
APR Effective 1/5/2023*
Home Equity Line of Credit
Fixed Rate Advance
Choosing a HELOC from BECU
Home equity lines of credit (HELOC) allow you to borrow money using the equity or value of your home as collateral. HELOCs may be a better alternative than a credit card, or personal loan, as rates tend to be lower (as the loan is tied to your home), and interest paid may be tax deductible.
Features and Benefits
Our home-equity loans stand out in more ways than one:
- No application fee
- No origination fees, potentially saving you hundreds1
- Loans up to $500,000
- No appraisal costs, title insurance fees, document mailing fees, escrow fees or pre-payment penalty fees2
Uses of a HELOC
- Home improvement projects
- Debt consolidation (including high interest credit cards)
- Tuition or other ongoing expenses over time
- Home repairs, such as windows, new roof, energy efficient projects
How HELOCs Work
- Open-end loans: HELOCs are open ended meaning you borrow as you go - instead of borrowing a set amount of funds all at once, you withdraw and repay as needed. Minimum draw amount is $100.
- Draw period: HELOC's have a draw period - usually several years; you can withdraw funds during this time, and only pay interest on the loan. For example, BECU has a 10-year draw period meaning you can withdraw funds from the loan for 10 years. If you were approved for a $50,000 HELOC, you could withdraw (and pay back) from that $50,000 amount at any time during that 10 years.
- Repay period: At the end of the loan, HELOC's go into a repay period - usually several years; you no longer withdraw on the loan and now repay what's owed. Let's say you borrowed $28,000 of your $50,000 HELOC and already repaid $4,000. You now spend the remaining "repay" period repaying the remaining $24,000 in monthly installments3.
Fixed Interest-Rate Advance
- You can take out any sum up to your HELOC maximum at any time up to your loan limit. However, there are benefits to locking in the rate on larger sums. Here's how it would work:
- Select any sum of $5,000 or higher (up to the total of your loan amount)
- Have up to three different fixed-rate loans at one time4
- Learn more about fixed-rate advances
The line of credit appears as an account in your BECU Online Banking, and you can easily initiate a free, same-day transfer to your checking account.
Like a credit card, you qualify for an amount, then how you choose to use it is up to you - all of it, some of it, or even just a little of it.
10 years—this is known as the draw period. During the draw period you can access funds up to your account limit and have the option of making interest only payments – subject to the lesser of $100.00 or your account balance. When the draw period ends, the repayment period begins.
15 years. The new monthly payment includes principal and interest with the repayment not exceeding 180 months. Note: The APR continues to be variable and based on the Wall Street Journal prime rate, plus or minus the margin, which is provided with the original loan documents.
a) You will no longer be able to access funds from your HELOC once your draw period expires.
b) If you have a balance on your account, your new required minimum payment includes the principal and interest.
c) Your payment may be significantly higher if you have only been making interest-only payments. Please note that the APR continues to be variable and based on the Wall Street Journal prime rate, plus or minus your margin, which was provided with your original loan.
The interest may be tax-deductible; however, the eligibility depends on various factors. Please consult with your tax adviser.5
1The APR for line of credit advances ranges from 7.74% to 10.84%. This APR is based on the Prime Rate in effect on the last day of the previous month, plus a margin, but will never exceed 18.00% or go below 3.25%. The APR for Fixed Rate Advances (FRA) currently ranges from 7.74% to 10.84%, the FRA APR will be the rate in effect when the FRA is established, which can only occur once the HELOC funds and an advance is taken. Your specific APR(s) is determined by your creditworthiness and property. The quoted APR ranges are accurate as of 1/1/2023 and are subject to change. In order to open a Home Equity account, you must become a BECU member and satisfy BECU's underwriting criteria; not all applicants will qualify.
2Borrower will not have to pay any upfront fees (no origination fee, no appraisal fee, and no title report or title insurance fee) to open the HELOC in normal circumstances, If the title report shows more than one existing lien, judgments, deceased owners or other title issues, or if the appraisal shows problems with the subject property, however, then Borrower may be required pay third parties to subordinate or otherwise resolve such title issues and/or to repair or otherwise resolve such property problems. These third-party charges may range from an average of $150.00 on the low-end to an average of $775.00 on the high-end based on the specific circumstance. This range of charges does not include estimates for the costs of home repairs since they can vary greatly. Borrower also will be required to pay for optional services (e.g., retaining an attorney not required to open a HELOC). In South Carolina, where the law requires use of an attorney, BECU will be solely responsible for paying all attorney's fees and costs necessary to open the HELOC, and will perform this responsibility fully by paying all reasonable attorney's fees and costs related specifically to the closing based on rates typically charged by attorneys in the local market for the closing of similar HELOC transactions. Borrower will be required to pay for hazard insurance (including flood insurance, if applicable) throughout the term of the HELOC. Borrower will not be required to pay any periodic fees to maintain the HELOC, nor any fees to obtain a variable rate or fixed rate advance during the term of the HELOC. When the HELOC terminates, Borrower will be required to pay a reconveyance fee ranging from an average of $125.00 to $235.00 but is subject to change.
3During the draw period, your monthly payment will equal the amount of accrued interest, subject to the lesser of $100 or your outstanding balance. Because the minimum monthly payment during the draw period is potentially interest only, your principal balance may not be reduced. During the repayment period, your monthly payment will increase and equal the amount of principal and interest necessary to pay off the loan balance by the end of the 180 month repayment period.
4There is no distinction between the draw and repayment periods for Fixed Rate Advances (FRA). Your monthly payment for any FRA will immediately equal the amount of principal and interest necessary to pay off the FRA balance by the end of the FRA's term.
5Information contained on this website does not constitute legal or tax advice. Individuals should consult with their financial adviser and/or attorney for advice.