Home Equity Lines of Credit
A Home Equity Line of Credit (HELOC) is an open-ended, revolving loan with a variable rate that allows you to withdraw funds from your available line of credit, just like you would with a checking account. A HELOC is a sound way to use the equity in your home (the amount of your home’s appraised value that you own once the remaining principal balance is subtracted) to finance home improvement projects or to consolidate debt from credit cards and other loans into one easy monthly payment.
HELOCs are best for people who need to be able to draw funds as necessary over a span of time. Here’s an example: Let's say you're starting a very large home improvement project, like an addition, and you don’t know how much the project will end up costing or how long the project will take to complete. A HELOC would be quite advantageous for you because you will only be borrowing money as you need it, when you need it, to get this addition built.
An important note: Unlike a conventional loan where the Annual Percentage Rate is fixed over the course of the loan, a HELOC’s rates are variable and may change as the Prime Rate (a rate established by the Federal Reserve Board based on what banks charge their most creditworthy customers) fluctuates.
A Bronco Home Equity Line of Credit offers you:
- A flexible source of credit
- Access to funds when you need them
- 8 year draw period
- Possible tax advantages; consult your tax advisor
- Loan-to-value (LTV) ratios up to 80%, but not to exceed $100,000 (As an example, if your home has been appraised at $200,000 and you still owe $100,000 on the mortgage, then your equity in the home is $100,000. Now, let's say you want to borrow $60,000 against that $100,000 of equity. $60,000 plus the $100,000 you still owe divided by the value of your home ($160,000/$200,000) equals an 80% loan-to-value ratio.
- 20-year repayment period (After an established "draw period," or the length of time the borrower is allowed to withdraw funds from the line of credit has passed, funds may no longer be withdrawn and must be paid back within the “repayment period” phase.)
Not yet a member? It's easy. Simply call 757.569.6000 or email us. Already a Bronco member and want to open another account? Call us or come on in and bring your ID.
Must maintain adequate insurance. 5% penalty for late payments. See a Real Estate Loan Specialist or contact us at 757.569.6000 for more details. Membership eligibility required.
Home Equity Line of Credit
- Annual Percentage Rate (APR) is based on the prime rate plus a margin and line amount and is subject to change monthly
- Rate will never exceed 18.00% APR by law (Your specific rate is based on the Prime Lending Rate plus a margin, which is established by the Federal Reserve and often fluctuates over time. Since a HELOC is a variable rate loan, if an increase in the Prime Lending Rate causes your HELOC rate to increase, by law it can never exceed 18.00% APR.)
- The minimum credit advance you can receive is $2,500 for the first advance and $250 for each subsequent advance
- Loan-to-Value of up to 80%, not to exceed $100,000
- 20 year term with an 8 year draw period and 12 year repayment period.
- 5% penalty for late payments.
- Fees, ranging from $300 to $500, may be incurred
- With a draw of $10,000 in new Bronco money, Bronco pays:
- all attorney fees and closing costs if a Bronco-preferred attorney is chosen or
- if not, $300 plus recording fees toward your chosen attorney and any remaining closing costs.
- A balloon payment may result if paying the minimum period payments does not fully amortize the outstanding balance by specified date or time.
- Must maintain adequate property insurance
- Membership eligibility required
- See a Member Service Representative for more details
- See a tax advisor regarding deductibility of interest
- Not all applicants will qualify