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Thursday, 11/26 - Closed
Friday, 11/27 - Closed

Home Equity Loans

It’s important to understand what equity is and how to use it wisely. You’ve worked hard to build value in your home and it can become one of your greatest assets. Our team can work with you to figure out the best use of your investment.

Low Rates

A home equity loan offers an affordable way to pay for large expenses like home projects, college tuition, or debt consolidation.

Extended Terms

Longer loan terms, like 10 and 25 years, lets you borrow what you need but keep your monthly payments manageable.

Borrow 90% of Your Equity

We will lend up to 90% of the equity you have built in your home, making large purchases affordable.

WHAT IS A HOME EQUITY LOAN?

A home equity loan is an affordable way to pay for large expenses by using your home as collateral.

A home equity loan is basically a second mortgage on your home. You borrow a fixed amount of money and pay it back over the term, just like your original mortgage. It’s a secured loan for your personal use. That’s an affordable way to quickly get a lump sum of cash or credit for large expenses and still maintain a low monthly payment. It takes the home’s equity and allows you to borrow against it for a fixed term.

WHAT IS A HOME EQUITY LOAN USED FOR?

A home equity loan is used for any number of personal reasons that require a large lump sum. Using your home’s equity is a great way to pay for larger home projects and still have an affordable monthly payment. Other reasons often involve debt consolidation, medical bills, college tuition, a wedding expense, or funeral expenses. In brief, it’s for any purpose where you’d need a significant amount of money.

WHAT IS EQUITY?

Equity is the percentage of ownership in an asset after subtracting any outstanding debts associated with that particular asset. Thus, your equity begins to build as you pay off the balance of your mortgage. So, as you continue to make payments on your original mortgage, the equity in your home should increase. Put simply, home equity is 90% of the appraised value of your home minus what you currently owe on the house.

HOW MUCH CAN I BORROW?

Money FCU can lend up to 90% of the appraised value of your home minus any outstanding balance on a first mortgage or home equity product. An easy way to calculate this is to take the appraised value of your home, multiply it by 90% (.90) then subtract your current mortgage balance and any other home equity loan balances. The resulting figure is the maximum dollar amount the Credit Union would be able to lend, if approved.

For example:

Appraised Value ($200,000) x 90% (.90) = $180,000 – Existing Mortgage Balance ($130,000) = $50,000

In the example above, you could borrow up to $50,000.

Money FCU has a loan calculator for your convenience.

IS THERE A DIFFERENCE BETWEEN A HOME EQUITY LOAN AND A HOME EQUITY LINE OF CREDIT?

Yes. In general, a home equity line of credit, known as a HELOC, is different in that it has a variable interest rate, which means that it will rise and fall with the market. The adjustable interest rate may start lower, but considering the length of the loan term, it can climb throughout the loan. Because of this, it generally seems to be a higher risk to the borrower. Additionally, you can draw money out as needed rather than one lump sum. This feature is useful when you have continuing expenses, such as the possibility of recurring hospital bills or multiple home improvements to complete over a few years. A home equity line of credit does offer a longer repayment period, though. You’re able to use the line of credit for 10 years. After that, you have another 15 years to pay it back for a total of 25 years for the loan.

CLEAR BENEFITS OF USING YOUR EQUITY

First, it offers an affordable way to obtain a large sum of money for your personal use. On top of borrowing more money with a home equity product, the interest rate and monthly payment are often lower than an unsecured loan or personal loan.

Additionally, you receive the funds rather quickly, usually between 4 to 6 weeks for the entire loan process. Also, the repayment period is often longer because your primary residence secures the loan. Home equity loans typically offer a repayment period of ten or more years as opposed to shorter terms on unsecured loans.

Finally, you also may be able to deduct the interest paid on a home equity loan or HELOC when you file your taxes.

HOW LONG DOES IT TAKE?

Approval for a home equity loan or HELOC takes 4-6 weeks to complete due to scheduling the appraisal, title search, flood insurance certification, and setting a closing date. Note that a home equity loan and HELOC both have closing costs. See our local closing costs estimator online.

COUNTY LIMITATIONS

Money FCU’s home equity loans and HELOCs are limited to the following counties:

  • Onondaga
  • Oswego
  • Madison
  • Cayuga

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Due to COVID-19, only the person(s) signing the closing documents will be allowed entry into the attorney’s office.

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What do you need in order to apply?

  • Proof of income for each borrower (paystub, social security statement, pension, etc.)
  • Current government-issued photo identification (for new members)
  • Proof of address if it’s different than what is on your ID (utility bill, vehicle registration, etc., for new members)
  • List of current loans and outstanding debt
  • Your first mortgage information (if any), including current balance and who holds the mortgage

HOME EQUITY LOANS IN A FLASH

Home Equity Loans:

  • As low as 2.49% APR* FIXED interest rate
  • Among the lowest interest rates available
  • Lump sum draw
  • Borrow up to 90% of your home’s equity
  • Fixed monthly payment
  • Terms up to 10 years
  • Closing costs
  • 4-6 week process
  • Put a lien against the home

Home Equity Line of Credit (HELOC)

  • 4.50% APR* VARIABLE rate
  • Draw money out as needed
  • Draw period of 10 years with an additional 15 years to pay it back
  • Closing costs
  • 4-6 week waiting period
  • Puts a lien against the home

Not sure if a home equity loan is the right type of loan for you? Take a look at our Best Tips for Your Home Improvement Loan blog. This blog covers other loan types that might also fit your needs.

CAN I SPEAK WITH A PROFESSIONAL WHO WILL HELP ME DECIDE?

Do you want someone to help advise what loan options would work for you and why? Our lending specialists are here to help.

Money FCU also has free financial coaches who will look at your finances and help you decide what your best options are. They may make recommendations on which financing options and repayment plans would work best for your specific situation. It’s always good to consider having professional help when making significant financial decisions.

I’M READY TO APPLY

You can apply online or submit a paper application. Thank you for choosing Money FCU.

*APR = Annual Percentage Rate. All Credit Union loan programs, rates, terms and conditions are subject to change at any time without notice. Term of up to 120 months; estimated monthly payment of $10 per $1,000 borrowed. Equal Housing Lender. Not responsible for typographical errors.

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