 |
|
|
|
|
|
|||||||
|
||||||||||
 |
 |
 |
 |
 |
 |
 |
 |
 |
| Thursday, November 20, 2008 |
|
|
|
|
Commonly Asked Questions (Home Equity Loans)
How much can I borrow? Your credit limit (also known as available equity) is determined by taking a percentage (for example 85%, 90% or 100%) of your home's appraised or fair market value and subtracting the balances of any outstanding mortgages on the property. If you qualify, the minimum home equity loan or line of credit amount is $10,000 and in most cases the maximum is $500,000. 
Back to topWhat are the terms or repayment periods available? Home equity loans offer terms between 5 and 15 years. Home equity lines of credit can be drawn on for 15 years. After 15 years, you can apply to renew your line of credit. If you do not renew, you can pay your account balance in full or you can choose to make payments of interest and principal for up to 15 years, depending upon the repayment terms and conditions of your account agreement.
Back to top What are the minimum payment terms? For home equity loans, the amount you borrow determines your payment amount, which stays fixed for the life of the loan. For home equity lines of credit, your minimum payment during the 15-year draw period is equal to one month's accrued interest, plus any assessed fees (a late fee for example). You can elect to pay only interest due or a payment equal to paying the loan in 15 years.
Back to top Is the interest rate fixed or variable? Home equity loans offer a fixed interest rate with fixed monthly payments, while home equity lines of credit feature a variable rate, so monthly payments can increase or decrease as rates and your principal balance change. Interest rates are based on the amount you borrow and the term of the loan or line of credit.
Back to top How is the interest rate calculated? The general interest rate level in the economy is influenced by the Federal Reserve Board, degrees of inflation, demand for borrowing money, the stock market, and a number of other factors. A home equity line of credit has a variable interest rate, so monthly payments increase or decrease as rates and your principal balance change. A home equity loan has a fixed interest rate, giving you the peace of mind that your payment amounts won't change with rate fluctuations.
Back to top What is the maximum APR on my home equity line of credit? The Annual Percentage Rate (APR) for a Consolidated Federal Credit Union home equity line of credit will not exceed 18%.
Back to topIs the interest tax deductible? In most cases, the interest on a home equity loan or line of credit of up to $100,000, and a maximum loan-to-value ratio of 100%, is tax deductible. Consult your tax advisor about your specific situation. IRS Publication #936 "Home Mortgage Interest Deduction" has more information.
Back to top How quickly can I get approved? If you apply online, you may be approved instantly, subject to verification of your application information.
Back to top How quickly can I close my loan? You can close your loan within 10 business days if you qualify. In order to qualify, you must meet certain credit criteria and be eligible for an automated valuation appraisal. The average time for closing a loan varies, but generally loans close within 20 business days.
Back to top Are there any fees to apply? There are no fees to apply. However there may be fees due at closing, depending on the type of home equity account you choose and the state in which the collateral property is located.
Back to top Is there an annual fee? No.
Back to top Is there a prepayment fee? No, but if you close your line of credit within the first 3 years, you will be charged the cost of setting up your loan, up to $500.00.
Back to top How can I access my home equity line of credit? You can access your home equity line of credit through
Back to top
When will I be billed and how often? Your home equity loan payment is due monthly.
Back to top Ready
to choose a home equity account from Consolidated Federal Credit Union?
View
our home equity account options to compare
our accounts side-by-side, or call a CFCU loan
officer.
|
|
|
||||
Calculate Payments
