A HELOC Can Make Your Financing Dreams Come True
Did you know that the equity in your home could help you achieve your financial goals?
Through a Home Equity Line of Credit (HELOC), you could borrow against that equity at lower rates than most standard term loans. And the interest paid could be tax deductible (please consult your tax professional for details).
But first, what exactly is equity? It’s the market value of a home, minus the existing mortgage amount. For example, say a home is appraised at $600,000, and the existing mortgage is $250,000. The math: $600,000 minus $250,000 = equity of $350,000.
How much would you be able to borrow? Lenders set a percentage of the appraised value of the home, then minus the existing mortgage amount to arrive at that figure.
Say the percentage is 80% -if a home is appraised at $600,000, 80 percent of that is $480,000. Now minus the existing $250,000 mortgage, for a total of $230,000.
However, lenders look at other factors such as income, debts and credit history, so the lendable amount could be smaller.
How do you access the funds in a HELOC? At Aloha Pacific FCU, a set of free checks is issued. If you have enrolled for an online account, you could transfer funds from your HELOC to your regular checking account, too – then use your checks or debit card for transactions.
There is a certain “draw” period, a length of time during which you may access the funds in the HELOC and begin to repay the loan plus interest. After the “draw” period, there may be an amortization or repayment period, during which you may not “draw” any funds but would continue to make monthly payments until the loan is repaid. An example would be a 10-year draw period and a 30-year amortization period.
Are there other costs? In addition to the Annual Percentage Rate (APR), there are fees such as appraisal, trust review and attorney fees that could add to the monthly payment on the loan.
APFCU’s Amazing Home Equity Line of Credit
Aloha Pacific Federal Credit Union is offering the Happiest HELOC rates: • 0.35% APR for the first year… and then…. • 3.50% APR for years two to five • After 60 months, the APR is variable • No annual fee • Receive up to $500 in closing costs Save time! Apply online at alohapacific.com; or visit any APFCU branch. Call 531-3711 for more information and see how your home’s equity can work for you.
Rate effective 9/1/16 & subject to change. Program may be modified or canceled at any time. Membership ($5 in Regular Savings) required. Subject to credit approval. APR = Annual Percentage Rate. See branch for more information about applicable fees & terms. Some restrictions may apply. HELOC offer is a promotional rate of 0.35 % APR for 12 months, then 3.50% APR for 48 months. After 60 months, the APR is variable. The current indexed rate is based on the prime rate published in the Wall Street Journal, plus 1.00%, adjusted quarterly (5.00% min. & 18.00% max), with a 10-year draw and 30-year amortization period. Maximum line: $250,000. Applies to owner-occupied properties with required insurance. Maximum loan-to-value of 80% in Hawaii; maximum loan-to-value of 70% in Nevada. Estimated 3rd party fees (ALTA policy, appraisal, trust review & attorney, etc.) for a $250,000 HELOC are $500 to $2,500. APFCU offers up to $500 closing credits against all 3rd party fees with an initial draw of $10,000 or more at closing; all closing credits paid by APFCU must be reimbursed if the loan is closed before 36 months from the opening date.
Federally insured by NCUA