If you’ve ever taken out a loan or used a credit card for a major purchase, you’re familiar with the process of borrowing money, but did you know you also can use your home for funds? A home equity line of credit (HELOC) lets you get the money you need, and a credit union can help you set up the arrangement. Honolulu-based Hawaiian Tel Federal Credit Union offers a variety of services to help you borrow funds at affordable loan rates and explains essential facts about a home equity line of credit.
Credit Unions Tips About HELOC
It Uses Your Home as Collateral
A home equity line of credit lets you borrow against your property’s value and use your house as collateral. You will make set monthly payments according to the amount you borrow and the loan’s interest rate, which often depends on the market. A HELOC is popular because it often has a lower interest rate than other borrowing options, such as a credit card or student loan. Many people use a HELOC to pay for major expenditures they can’t afford out of pocket, such as home improvements.
Your Can Get One at Your Local Credit Union
You can reach out to your local credit union or financial institution to inquire about taking out a home equity line of credit. Their loan experts will walk you through the steps and fine print. To qualify, you must have equity in your home, an acceptable credit score, and the ability to make the minimum monthly payments.
You Risk Property Loss If You Can’t Repay
Since a HELOC borrows against your house’s value, it comes with a few risks. At the start of your loan, you’ll be in a draw period, which is a certain number of years during which you will pay only interest on the loan. After that, your monthly payments could skyrocket if you have a variable loan rate, so it’s important to ask your lender about an estimated amount prior to agreeing to a HELOC. If you’re unable to repay the full amount, the lender has the right to foreclose on your home.
If you’re interested in a home equity line of credit or learning more about personal banking options, Hawaiian Tel Federal Credit Union can help. They have branches throughout Oahu and one set to open on Maui for your convenience. Since chartering more than 80 years ago, this credit union has been committed to helping Hawaii residents achieve their financial dreams. To learn more about their services and find your nearest location, visit hitelfcu.com or call them on Oahu at 832-8700 or toll-free at (800) 272-5255.