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Home Equity FAQs
A HELOC works a lot like a credit card. It’s a flexible line of credit secured by your home’s equity but with a “draw” period (typically the first 15 years of a HELOC) which you may access from your available balance. You can draw at any time from this balance up to your available credit limit for things like home improvement, a medical bill or a family vacation.
Interest rates on HELOCs are usually variable rates. With a SECU HELOC, you can lock in up to three fixed rate, fixed payment sub-accounts under one master line. Often the interest on a HELOC is tax deductible, although you should check with your tax advisor.
Not at this time. However, our Home Equity Line of Credit offers you the option of locking in up to three fixed rate sub-accounts under one master line of credit. This gives you the advantages of both a fixed rate/fixed term account and a revolving home equity line.
This is where you can divide up your HELOC into smaller portions which are called sub-accounts. A sub-account gives you the advantage of a fixed rate, a fixed payment, and a fixed pay off schedule. Dividing up your HELOC also makes it easier to track your money.
For example, let’s say you want to purchase an $8,000 kitchen countertop. You have a $20,000 credit limit in your HELOC and no outstanding balance. With a SECU HELOC, you can create an $8,000 sub-account and either lock in that amount at a fixed rate with fixed payments, or allow the $8,000 to remain in your variable rate outstanding balance. Either way, you’ll still have $12,000 in affordable financing that you can still access for virtually any purpose.
No, but the total of your outstanding balance (including all sub-accounts and any revolving balance) may not exceed your total master credit limit.
We allow up to three fixed rate sub-accounts.
No. SECU will calculate one master payment for each of your sub-accounts and for any revolving balance you have outstanding. This one payment will be allocated to the appropriate sub-accounts. There is no need to individually pay each account or calculate separate payments. SECU does all that for you!
The additional $200 will be applied to any outstanding balance in the revolving line unless the member requests otherwise.
New sub-accounts will receive the APR in effect at the time the member opens that sub-account. Rate qualification will be based on the LTV and credit score in effect at the time the member opened the HELOC. You can check our current APRs here.
Intro rates will not apply to HELOC sub-accounts. If a sub-account is opened during an intro rate period, the APR will be that in effect at the time the sub-account is opened.
At present, you should call SECU or visit one of our branches.
There should be no difference in the tax deductibility of the interest on your sub-accounts vs. the interest on your HELOC revolving balance. However, you should consult with your tax advisor regarding deductibility.
HELOCs resulting from applications submitted on or after October 19, 2016 are eligible for sub-accounts, provided the account and the member are in good standing.
No, funds must be available in order to open a fixed sub-account.
Members may set up a sub-account at any time but may use ONLY their available balance. Members cannot take outstanding balance and put it into a sub-account.
It depends on the amount of your sub-account:
- $5,000 to $9,999 for a term of 12 to 60 months
- $10,000 to $14,999 for a term of 12 to 120 months
- $15,000+ for a term of 12 to 180 months
No. The terms are set.
No. Sub-accounts are fixed rate, fixed term, fixed payment accounts. Members who want to go back to a revolving balance will need to pay off one of their sub-accounts or take out a completely new HELOC.
At this time, sub-accounts are available only for new HELOCs resulting from applications submitted on or after 10/19/16.
SECU renders a decision based upon information provided on the loan application. Because this decision is based upon information that has not yet been verified, it is considered a pre-approval subject to verification and/or receipt of additional information. Once all of the condition outlines in the pre-approval letter are satisfied, the loan will receive a final approval.
Call the Home Equity Department at 443-517-5676 or 800-879-7328.
The LTV is the relationship between the amount of the home equity loan and the value of the real estate property being pledged as collateral. For example, if you have a home that appraises for $100,000, and you have a $50,000 first mortgage and a $25,000 second mortgage, the two loans together represent a 75% loan to value.
No. Your monthly payments are credited towards the loan’s principal and interest.
You cannot increase an existing line of credit because the loan amounts are recorded in the county real estate land records. Therefore, you would need to reapply to increase your existing line of credit to match the loan amounts to the recorded lien amounts.
SECU pays all closing costs on owner-occupied and second home loans up to $500,000. For all loan requests over $500,000 and on Investment/rental properties, the member will need to pay at closing and this can be done directly from the initial withdrawal.
For loans where SECU does pay the closing costs, you must reimburse those costs to SECU if your line of credit is paid off within 36 months of the original loan date. Closing costs generally range from $850 top $1,000 on a $20,000 line of credit.
You may pay off your HELOC using any payment channel. You can always find the payoff amount in online banking. To close your HELOC, you must call SECU or visit a branch.
Once your loan is ready to close, you will meet with a SECU branch representative at a SECU branch or with a settlement notary at your home or another location of your choosing.