As your house has increased in value, your equity probably has, too. Make great use of it to pay for home improvements, a vacation or any large expense you encounter.
- Use the equity in your home as collateral
- Low fees and interest rates
- Only pay interest on what you use
Home Equity Line of Credit vs. Second Mortgage
We know the options can be overwhelming - we're here to help. The chart below explains the differences between a Home Equity Line of Credit and a Second Mortgage. If you decide a Second Mortgage is the best option, you may apply here.
|Home Equity Line of Credit||Second Mortgage|
|Monthly Payments||Payment set each time an advance is made*||Set amount each month|
|Financing||Up to $250,000 or 90% of equity||
Up to $250,000 or 100% of equity
|Repayment term||Up to 20 years (5-year draw period)||Up to 15 years|
|Tax deductible interest*||Possibly||Possibly|
|Appraisal of valuation||May be Required||May be Required|
|Rate||Variable rate***||Rate fixed for balloon period|
* A payoff period of 240 monthly payments (20 years) will be used to calculate the payment. Payments will be set to repay the balance after an advance, at the current annual percentage rate, within the payoff period. Payments may also change if the annual percentage rate increases or decreases.
**Consult your tax professional regarding interest deductibility
*** The rate is based upon the value of an index. The index is the highest rate identified as the Prime Rate in the Money Rates section of the Wall Street Journal. Rates are subject to change daily. Based upon the LTV ratio, a margin is added to the value of the index. The floor rate is 2.99% (Up to 80% LTV) and the maximum rate will never exceed 18.00%. You can obtain credit advances for 5 years. Your payment will be set to pay off any balance after the initial draw period for a period of 20 years. Minimum payments will never be smaller than $100. Payments will remain the same unless an advance is made. There is no minimum cash advance. The maximum home equity line depends on the home value and total loans secured by the home. Closing costs may exist and you may be required to pay for an appraisal up front with the possibility of reimbursement at closing, at the sole discretion of BHCCU. You must consult a tax advisor regarding the deductibility of interest.