When you need to borrow for a home renovation, debt consolidation, or other expenses, and using your home as collateral is an option, a Home Equity Line of Credit (HELOC) or a Home Equity Loan may be right for you. Often referred to as a second mortgage, both a HELOC and Home Equity Loan include competitive rates and several lending options.
Have questions about the HELOC application process, payments, etc.? View our FAQ for answers to the most common questions.
A line of credit secured by the equity in your home. You can borrow up to a certain limit (set by the lender) and then pay it back over time.
A HELOC is an open-end line of credit and you are able to make draws as needed during the draw period. A home equity loan, or second mortgage, is “closed end” meaning the balance is determined at loan closing and monthly payments of principal and interest are scheduled over the term of the loan.
When you’re approved for a HELOC, you can use the line of credit during the “draw period.” This is the amount of time you have to draw funds from the HELOC.
During the draw period RFCU’s HELOC products require interest-only payments or $100 whichever is greater. Interest-only payments are based on the outstanding loan balance and APR.
Yes. You can pay up to the full outstanding balance at any time without penalty.
After the draw period of a HELOC is over, you enter what’s known as a repayment period. Your loan converts to a repayment schedule, during which principal and interest will be due every month. The repayment period is 10 years for the Quick HELOC and 15 years for the Classic HELOC.
During this time, you will not be able to make additional draws or extend more credit, you simply make the required minimum monthly payment until the balance is paid in full.
Loan payments for the repayment period are scheduled over the term (10 years for Quick HELOC or 15 years for the Classic HELOC). Your APR and balance will determine your monthly payment amount. Monthly payments will change if the APR increases or decreases, or if additional payments to principal are made.
You have the option of reapplying for HELOC products being offered by RFCU at the time of your draw period expiration. Approval will be subject to creditworthiness and property valuation at the time of future application.
Your HELOC at RFCU would need to be subordinated (in second lien position) to the new first mortgage. This is a common occurrence and is handled by RFCU Mortgage Servicing.
A credit limit increase will require a new application. Approval is subject to creditworthiness and a new property valuation.
There is no fee charged for not utilizing the LOC and interest is only charged when there is a balance on the LOC.
The interest may be tax-deductible; however, the eligibility depends on various factors. Individuals should consult with their tax adviser for advice.
Yes, you have the option of paying your line of credit down to $0.00 and either leaving it open (a paydown), or closing the line of credit (a payoff), at any time without penalty.
Yes, your HELOC has a variable APR based on the US Prime Index plus a fixed margin. After account opening, HELOC APRs are subject to change on a monthly basis.
RFCU currently pays standard closing costs associated with the Quick and Classic HELOC products.
Yes, HELOCs provide you access to the equity in your home1.
Yes, you can refinance to the RFCU Quick or Classic product. You will need to apply and indicate that you wish to payoff and close your current HELOC. Approval is subject to creditworthiness and a property valuation.
There are multiple ways to access your line of credit including, credit card, online banking, teller and call center.
Yes, HELOCs can be in either first or second lien position.
Yes, you must be a member of RFCU in order to apply.
Origination of HELOCs is no longer handled in branches. If you require assistance, you can always seek out trusted advice by calling 800.234.1234 or applying online will direct your application directly to your loan processor and they will contact you directly to guide you through the process.
RFCU offers up to 95% LTV on primary residences and 80% LTV on vacation, second home, or investment properties. Approval will be subject to creditworthiness and property valuation at the time of future application.
RFCU does not require an initial draw on Quick or Classic HELOC products.
Payments can be made by transfer or external payment on RFCU online banking, over the phone, or in your local branch.
Depending on your choice of the Quick or Classic HELOC multiple valuations methods are used. These include but are not limited to: credit bureau equity valuations, appraisal, etc.
HELOCs are only available for properties located in Alabama and Tennessee.
You must be an RFCU® member to obtain a HELOC loan. Must be eligible for membership and open a share savings account. A minimum balance of $5.00 is required to open and must be maintained in share savings account at all times. All HELOC loans are subject to credit approval. Rates are determined by an evaluation of applicant credit at account opening. Your rate may be different. Variable rates are subject to change after account opening. Must have online banking user name and password to access HELOC online application. Must create separate user name and password to gain access to Home Equity loan application process. RFCU is an Equal Credit Opportunity Lender. Other restrictions may apply.
Rates current as of .
For Home Equity Line of Credit (HELOCs):
1Finance up to 95% of total Loan-To-Value of the equity in your primary residence or 80% of the total Loan-to-Value for a vacation/second home or investment property. Total HELOC aggregate cannot exceed $750,000. RFCU pays closing costs. Property insurance is required.
2The minimum Annual Percentage Rate (APR) is % and may vary. However, your initial APR is based on an evaluation of your credit and may be different. The maximum APR is 18% or the maximum allowed by law, whichever is less. $10,000 to $250,000 equity lines.
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