BECU Answers Your Questions about HELOCs
Get answers to questions about a home equity line of credit (HELOC), including how to use and repay this type of loan.
HELOC stands for home equity line of credit. HELOCs let you borrow money using the equity (value) of your home as collateral. HELOCs are "open-ended” loans, like a credit card. That means you withdraw1 and repay funds as needed instead of borrowing a set amount all at once.
HELOC stands for home equity line of credit. HELOCs let you borrow money using the equity (value) of your home as collateral. HELOCs are "open-ended” loans, like a credit card. That means you withdraw1 and repay funds as needed instead of borrowing a set amount all at once.
You can use a HELOC in a variety of ways, including:
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Home improvement projects
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Debt consolidation, including high-interest credit cards
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Tuition or other ongoing expenses
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Home repairs, such as window replacement, energy-efficiency projects, a new roof, or unexpected expenses or home emergencies
You can use a HELOC in a variety of ways, including:
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Home improvement projects
-
Debt consolidation, including high-interest credit cards
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Tuition or other ongoing expenses
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Home repairs, such as window replacement, energy-efficiency projects, a new roof, or unexpected expenses or home emergencies
Only homeowners can apply for a HELOC.3 When reviewing your application, lenders will evaluate other eligibility factors including your income, employment status, credit score and history, and how much you would like to borrow.
Only homeowners can apply for a HELOC.3 When reviewing your application, lenders will evaluate other eligibility factors including your income, employment status, credit score and history, and how much you would like to borrow.
BECU offers HELOCS up to $500,000. However, the exact amount you can borrow depends on the value of your home, your mortgage balance, where your property is located and other factors.
BECU offers HELOCS up to $500,000. However, the exact amount you can borrow depends on the value of your home, your mortgage balance, where your property is located and other factors.
Both a HELOC and a home equity loan use your home's equity as collateral.
A home equity loan is a fixed-rate loan that involves a single disbursement of funds.
HELOCs are more versatile. The entire credit limit is available at disbursement, but it can also be used as a revolving, variable-rate line of credit with funds available for withdrawal and repayment over set periods. BECU HELOCs also have a fixed-rate advance option when you withdraw amounts of $5,000 or more.2
Both a HELOC and a home equity loan use your home's equity as collateral.
A home equity loan is a fixed-rate loan that involves a single disbursement of funds.
HELOCs are more versatile. The entire credit limit is available at disbursement, but it can also be used as a revolving, variable-rate line of credit with funds available for withdrawal and repayment over set periods. BECU HELOCs also have a fixed-rate advance option when you withdraw amounts of $5,000 or more.2
Unlike a HELOC (a revolving line of credit), a home improvement loan (an installment loan) does not use your home as collateral. Because of this, home improvement loans have a lower loan amount — up to $35,000, compared to up to $500,000 with a HELOC — and the interest rates tend to be higher than with HELOCs. Home improvement loans are issued as one lump sum.
Unlike a HELOC (a revolving line of credit), a home improvement loan (an installment loan) does not use your home as collateral. Because of this, home improvement loans have a lower loan amount — up to $35,000, compared to up to $500,000 with a HELOC — and the interest rates tend to be higher than with HELOCs. Home improvement loans are issued as one lump sum.
The interest may be tax-deductible, but your eligibility depends on various factors. You should consult with your financial advisor, attorney or both for advice.
The interest may be tax-deductible, but your eligibility depends on various factors. You should consult with your financial advisor, attorney or both for advice.
You can refinance with us if you have a HELOC at another institution. To refinance your HELOC, you apply for and fund a BECU HELOC and use it to pay off your existing HELOC at the other institution. You might be charged a reconveyance fee from the other financial institution when transferring your HELOC to BECU.
You can refinance with us if you have a HELOC at another institution. To refinance your HELOC, you apply for and fund a BECU HELOC and use it to pay off your existing HELOC at the other institution. You might be charged a reconveyance fee from the other financial institution when transferring your HELOC to BECU.
You can draw the entire loan limit of your HELOC as soon as it funds. More commonly, members use a HELOC like a credit card: qualifying for a set amount, then using it as they need it.
You have 10 years to draw funds. During this draw period, you need to make minimum monthly payments of interest-only or $100, whichever is more, if you have a balance on the account.
After your draw period ends, you enter the repayment period. Your new required minimum payment will include the principal and interest. If you made only the minimum payments during the draw period, your new minimum payment may be significantly higher.
You have 15 years (180 months) to repay the HELOC. The repayment period begins at the end of the 10-year draw period. Your monthly payment during the repayment period includes principal and interest. The annual percentage rate (APR) on your HELOC will continue to be variable and based on the Wall Street Journal prime rate, plus the margin as provided with the loan documents.
We do not charge annual fees on HELOCs.4
Make payments in Online Banking, by phone or at any location.
After your HELOC is closed, we will collect the reconveyance fee your state charges to remove the lien from your property. This is not a BECU fee. Reconveyance fees vary by state and are subject to change.
| State | Reconveyance Fee | |
|---|---|---|
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Arizona
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$54.00
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California
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$107.00
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Idaho
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$79.00
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Illinois
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$55.00
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Kansas
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$44.00
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Missouri
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$48.00
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Oregon
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$110.00
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Pennsylvania
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$68.00
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South Carolina
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$34.00
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Washington
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$327.50
|
It's possible. HELOCs are open-ended loans with a variable interest rate. This rate is based on the Wall Street Journal prime rate as of the last day of the prior month, plus or minus the margin. The variable rate may go up and down during your HELOC draw period if the prime rate changes.
However, with a BECU HELOC, you have the option to take a fixed-rate advance2 of at least $5,000 and lock in your interest rate for a set period of time.
A fixed-rate advance is an optional way to lock the interest rate on funds drawn from your HELOC. FRAs are fixed-term loans with 1-to-15-year terms, depending on the loan amount. The interest rate on a FRA is locked in for the term you select when the FRA is established.
FRAs require principal and interest payments. An FRA loan is separate from a variable HELOC loan, which means you can owe funds on an FRA and the variable loan at the same time.
Here's how it works:
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Request a sum of $5,000 or more—up to the total amount available on your loan.
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Select a term from 1 to 15 years, depending on the sum requested.
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Lock in your interest rate based on when the FRA is established.
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Make monthly principal and interest payments on your FRA.
You can request an FRA in Online Banking.
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Log in to Online Banking.
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Select Equity Advantage or Home Equity Line of Credit.
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Click Get a Fixed Rate Advance.
You can also call us or visit a BECU location to get started.
Yes, with an FRA you have the option to lock the rate on funds currently owed on your HELOC or, you can request new funds at a locked rate.
You can have three FRAs active at any given time. There is no limit to the total number of FRAs you can have during your HELOC draw period.
In Online Banking, you can initiate a free, same-day transfer from your HELOC to your BECU checking or savings account. The line of credit appears as an account in your Online Banking. You can also request checks to draw from your HELOC.
Other ways to access HELOC funds are through the BECU mobile app, by calling us to request a funds transfer, or by visiting a BECU location, where a representative can move funds into another account for you or issue a cashier's check.
We can issue cashier's checks directly from your HELOC at any BECU location. We do not charge for this option as a benefit of membership.
You can move funds from your HELOC to your checking or savings account. You can also request checks that draw directly from your HELOC.
Call us or visit any location to request checks that draw directly from your HELOC.
1Minimum draw amount is $100.
2The rate for a Fixed Rate Advance (FRA) ranges from 7.74% APR to 10.59% APR as of 11/1/2024. You may convert all or a portion of your outstanding HELOC variable-rate balance to a FRA. The minimum outstanding balance that can be converted into a FRA is $5,000 from a HELOC account. No more than three FRAs may be open at one time. Contact a BECU representative for current information.
3In order to open a Home Equity account, you must be a BECU member and satisfy BECU's underwriting criteria; not everyone will qualify. BECU must be able to perfect a first or second mortgage lien on your one-to-four family residence. Borrower will not have to pay any upfront fees to open the HELOC in normal circumstances. Borrower is required to pay for optional services (e.g., if borrower retains an attorney that borrower is not required to use). In South Carolina, where the law requires use of an attorney, BECU will be solely responsible for paying all attorneys' fees and costs necessary to open the HELOC and will perform this responsibility fully by paying all reasonable attorneys' fees and costs related specifically to the closing based on rates typically charged by attorneys in the local market for the closing of similar HELOC transactions. If the title report shows more than one existing lien, judgments, deceased owners, or other title issues, or if the appraisal shows problems with the subject property, however, then Borrower may be required to pay third parties to subordinate or otherwise resolve such title issues and/or to repair or otherwise resolve such property problems. These third-party charges may range from an average of $150.00 to $775.00 based on the specific circumstance. This range of charges does not include estimates for the costs of home repairs. Additional state or local mortgage fees or taxes may apply. Borrower will be required to pay for hazard insurance (including flood insurance, if applicable) throughout the term of the HELOC. When the HELOC terminates, Borrower will be required to pay a reconveyance fee ranging from an average of $25.00 to $225.00. Loan programs, terms, and conditions are subject to change without notice.
4During the HELOC draw period, your monthly payment will equal the amount of accrued interest, subject to the lesser of $100 or your outstanding balance. Because the minimum monthly payment during the draw period is interest only, your principal balance may not be reduced. At the end of the draw period, your monthly payment will increase and equal the amount of principal and interest necessary to pay off the loan balance by the end of the 180 month repayment period. Your payments during both the draw and repayment periods will not include amounts due for property taxes and insurance. The APRs for BECU's HELOCs are variable and are based on the highest Prime Rate as published in the Wall Street Journal as of the date of any rate adjustment plus an applicable margin. Current HELOC rates range from 8.24% APR - 11.09% APR as of 11/1/2024 and are subject to change. The maximum APR that can apply to BECU's HELOCs is 18%. APRs do not include costs other than interest.
Boeing Employees' Credit Union NMLS ID 490518.