A Home Equity Line of Credit (HELOC) is a great solution to help you unlock your home’s value and finance important purchases from kitchen renovations to college tuition, or simply debt consolidation. A HELOC is a revolving account that allows you to draw on an “as needed” basis, up to a preset limit.
We’re currently offering our members a special promotional rate on a HELOC. Lock in your home’s value with an introductory rate of 2.99% APR2 for the first 12 months, and then as low as 5.99% APR3 variable for the life of the loan. And as an added benefit, pay $0 closing costs1! This offer is valid April 1 – 30, 2019.
Here are the five frequently asked questions by our members when it comes to HELOCs:
- How much can I borrow?
Your borrowing amount depends on your credit score and the amount of equity you currently have in your home. Generally members can borrow up to 85% loan to value, minus what you owe on your first mortgage. Or, in some cases up to 100% loan to value if you have a higher credit score and a lower debt to income ratio.
- What are the closing costs?
As a member benefit, Pen Air Federal Credit Union covers the closing costs on our HELOCs.
- Is there a pre-payment penalty?
There is no pre-payment penalty as long as you keep your HELOC open for at least 3 years. If closed prior to the 3 year time frame (including if you sell your home), the closing costs paid by Pen Air would have to be reimbursed and range from $150 to $500.
- How long will it take to get the funds?
Typically, the entire HELOC process from application to completion takes just a few weeks. Once the loan is closed, the funds must be available in your account within 4 days and can be accessed online or at any Pen Air branch location.
- How often can the rate adjust?
The rate is tied to Prime, so any time the Prime moves, the rate can change. Historically Prime moves at a quarter of a percentage point, so there aren’t any large jumps in rate. Pen Air will not raise the rate more than 2 percentage points in a calendar year.
Disclosures:© 2019 Pen Air Federal Credit Union. NMLS# 413053. 1Special Offer: Pen Air will pay closing costs on new Home Equity Line of Credit applications only. Loans paid off and closed in less than three years (36 months) from the loan origination date will require reimbursement of all closing costs paid by Pen Air. For loan amounts up to $250,000, closing costs typically rate between $150 and $900. The closing costs depend on the location of the property and the amount of the loan. No minimum draw required on loan. Flood insurance may be required. Owner occupancy required. 2Introductory Rate discount is available for New Home Equity Line of Credit applications. For the first twelve months after the open date, the monthly Periodic Rate for new transactions will be 2.99% APR. 3Beginning on the day following the first twelve months after the open date, the Periodic Rate and the corresponding APR for all transactions and balances will be based upon your contracted rate which will be a variable rate based upon the Wall Street Journal Period Rate which is 5.50% as of 12/20/18, plus a margin ranging from 0.49% to 1.49% and will never be more than 18%. Your contract APR will be based on serveral factors, including your credit history, loan to value ratio, property type and lien status. A sample HELOC payment based on $100,000 at 5.99% for 20 years is $715.85. Terms and conditions subject to change without notice. Subject to credit approval. Rate may vary based on individual.