Home Equity FAQs

Home equity loans provide you with a lump sum, which is typically repayable in equal monthly installments over the term of the loan. A HELOC is more flexible, because -- like a credit card -- it's a form of "revolving" credit: You can use as much or as little of that credit as you want and only pay interest on the outstanding balance. You can borrow, repay, and re-borrow up to your established limit.

Yes, HELOCs do have variable rates, meaning your interest rate could rise or fall. The HELOC rate is based on the Prime Rate. If the Prime Rate increases over your start rate, your interest rate will increase as well. These increases would adjust monthly. Our HELOCs have a lifetime rate cap (ceiling) of 18% APR*, so your rate will never be higher than this. Your HELOC start rate is the promotional rate for 6 months. The floor rate would be the prime rate plus any adjustments based on your combined loan to value and credit score at the time your loan was originated.

*Annual Percentage Rate

During the 10 year “draw” period, you will pay interest only on the HELOC amount you are using, though you’re free to pay down the “principal” (the amount you’ve borrowed) too. When the draw period ends, you will enter a 15 year “repayment” period. During that time, you will not be able to borrow anymore, and you will be able to use that time to pay down the principal and the interest.

The repayment period amortizes the remaining unpaid principal balance and the interest due over the 180-month repayment period. The rate is still variable during the repayment period, which means it can adjust monthly, but the floor and ceiling caps still apply.

The amount you can borrow with a VCCU HELOC depends on your mortgage balance and current equity. Equity is determined by assessing the value of your property and subtracting the amount you owe on your mortgage. VCCU HELOCs offer a minimum loan amount of $10,000 and a maximum amount of $250,000. For primary residences and second homes, borrowers can access up to 75% of the property's value. For investment properties, the borrowing limit is up to 65% of the property's value. In both cases, the maximum borrowing limit is $250,000.00.

Yes, Primary Residence and Investment Property. 

For primary residences and second homes, VCCU will cover most closing costs associated with a HELOC. These costs may include the credit report, junior limited title policy, flood certification, recording fees, local notary fees, automated valuation module, and property search. If a full appraisal is requested by the member to validate the property value obtained, the cost will be paid by the member. Additionally, the member is responsible for the following fees if applicable: unique services that are not part of our standard services, which may include Title charges to clear or transfer liens, Escrow fees for changes in title/vesting, payoff fees for credit cards, and additional liens.

For investment properties, the borrower is responsible for paying all fees associated with the HELOC. These fees include the following: junior limited title policy, flood certification, recording fees, local notary fees, automated valuation module, and/or appraisal fee, as well as title charges to clear or transfer liens, escrow fees for changes in title/vesting, and payoff fees for credit cards and additional liens.

If the line of credit is paid off and closed during the first thirty-six (36) months following the date of the Note, an Early Termination Fee of $500 is charged to reimburse the Credit Union for closing costs associated with the HELOC.

No, our HELOCs do not have prepayment penalties, but they do have an Early Termination Fee of $500 if the HELOC is closed within the first 36 months.

The best way to apply for our HELOC is through our online application. Once you have completed your application, the next step would be to upload your most recent pay stub(s), your most recent W-2(s), a copy of your recent mortgage statement and your current hazard/property insurance statement. A HELOC Specialist will get in touch with you regarding additional information.