What is a HELOC, and how does it provide financial flexibility?
Let’s start with the basics. A Home Equity Line of Credit (HELOC) is a variable rate open line of credit based on your home’s available equity. Homeowners are offered a line of credit which can be accessed when they need it during the draw period, which is the amount of time you have to draw funds from that available credit. Generally, a homeowner’s borrowing limit can be about 65-85% of the equity in their home, minus any other outstanding loans against it, such as a primary mortgage. The funds from a HELOC can be used to pay for home improvements, debt consolidation, major life events, and more.
A HELOC often has a lower interest rate and more flexibility than many other types of loans. You only use the money when you need it, and you only pay interest (during the draw period) on what you use. After the draw period of your HELOC has ended, you will enter the repayment period, during which both principal and interest will be due every month.
Benefits of a HELOC:
- Financial Flexibility
Homeowners can access the funds from a home equity line of credit to use it however and whenever they need it—like having cash on hand. You could pay for your next home improvement project, fund tuition expenses or pay off student loans, consolidate and pay off loans at a potentially lower rate, fund a life event or unforeseen expense. - Save on Fees and Closing Costs
Unlike the high fees charged by credit card companies for cash advances. Most HELOC lenders do not charge fees when you draw on your available credit. In addition, many lenders offer low or no closing fees. - Low Interest-Only Payments
Because they are secured by your home equity, HELOCs tend to have lower interest rates than unsecured loans like credit cards or personal loans. And, with a HELOC, homeowners pay interest only during the draw period on the amount they draw and only from the date the funds are withdrawn.
Why FourLeaf
With a Home Equity Line of Credit from FourLeaf, members receive:
- Zero application fees, zero annual fees, and zero closing costs[1].
- Financial flexibility to access the funds how you need them and when you need them while making low interest-only payments for the first 10 years (i.e., the draw period).[1]
Ready to unleash the power of your home’s equity?
All loans are subject to credit approval, membership and loan program requirements. Not all applicants qualify for the lowest rates and may be offered credit at higher rates or with different terms. Hazard insurance and, if applicable, flood insurance is required. Borrowing limits apply based on your home’s value. Home loans are not available in Texas. Conditions and restrictions may apply. Rates, loan programs, terms, and conditions are subject to change without notice.
[1] The standard APR is variable based on the U.S. Prime Rate as published in the Wall Street Journal, plus a margin (if applicable) and is subject to increase after consummation. The current standard APR is as low as 7.00% as of --/--/--. Not all applicants will qualify for the lowest rate and may be offered credit at higher rates and other terms based on creditworthiness. The minimum floor APR is 3.25%. HELOC rates may not exceed the maximum legal limit for Federal credit unions (currently 18%). The Prime Rate as of --/--/-- = 7.00%. Rates shown are based on a borrower’s primary residence, a maximum CLTV of 65%, a minimum initial draw of $25,000 taken at HELOC account opening†, and automatic payments‡ made from a FourLeaf personal savings or checking account. For Closing costs, see [3] below.
† Initial Draw of $25,000 or more: The APR includes a 0.25% discount if a Variable Rate Advance of $25,000.00 or more is drawn at account opening and the outstanding balance is maintained for at least twelve (12) consecutive months. The APR will increase by 0.25% if at any time your outstanding HELOC balance falls below $25,000.00 within the first twelve (12) months of account opening.
‡ Automatic Payments: The APR includes a 0.25% discount if your monthly HELOC payments are automatically withdrawn from your FourLeaf savings or checking account. The APR will increase by 0.25% if at any time your monthly HELOC payments are no longer automatically withdrawn from your FourLeaf savings or checking account.
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