Home Equity Loans / HELOC
Put your home to work for you
As a homeowner, you can use your home's equity as a borrowing tool and leverage the value you’ve built through years of mortgage payments. If you have property in Texas, a home equity loan or home equity line of credit (HELOC) can be an economical way to obtain a low-rate loan and enjoy a possible federal tax deduction in the process.
NOTICE OF POSSIBLE DELAY IN CLOSING YOUR HOME EQUITY LOAN
You are a valued member of RBFCU and we appreciate that you have applied for a Home Equity loan with us. As a result of changes in Texas Home Equity laws that will become effective on Jan. 1, 2018, if your Home Equity loan does not close by Dec. 30, 2017, the closing will be delayed until Jan. 16, 2018 at the earliest.
If your Home Equity loan is not closed during 2017, we are required by law to provide you with a new 12-day Updated Notice of Extension of Credit on Jan. 2, 2018, and your loan cannot be closed during the new 12-day notice period.
We apologize for any inconvenience this might cause you. Please call us at 1-800-580-3300, select option 3, option 2, then option 3 if you have any questions or concerns about this possible delay.
What to expect during the home equity loan process
Complete the home equity loan application online. Within two business days, you will be contacted by a loan officer and notified regarding your eligibility.
2. Complete paperwork
Sign required disclosures to start the state-required 12-day cooling off period. During this time, you can also work to collect and provide any additional documentation. Your loan officer will communicate these needs to you, but the list typically includes items like proof of insurance, a current mortgage statement, income and assets.
3. Finalize your loan
Your loan officer will provide a closing disclosure for your review three days prior to closing. You will need to close your loan at a title company, an attorney’s office or an RBFCU branch. Following this, your funds will be disbursed after three days.
What do I need to complete my application?
- How much you want to borrow
- The value tax-assessed of your property (you can find this information online through your county’s appraisal district
- Your current mortgage balance
- How long you want to finance your loan (the term)
- Contact information and personal information (name, address, phone number and email) for all owners listed on the property
Home equity loan vs. HELOC: Which option is right for me?
How funds are disbursed
Home equity loanGet immediate access to a one-time lump sum of money. This is the best option if you know the exact amount you need.
HELOCNot sure about the amount you need? A HELOC is a great option if you need access to funds over a period of time.
How to use my equity
Home equity loanDebt consolidation, refinance, tuition, small home improvement loan
HELOCEmergencies, ongoing home improvement, pay off debt, semester-based tuition, flipping houses
Home equity loanTerm options include 4, 7, 10, 15, 20 and 30 years
HELOCDraw period of 10 years with up to a 15-year repayment period
Fees and payments
Home equity loanMinimal closing costs for loans under $125,000, no application fee and no prepayment penalties
HELOCMinimal closing costs for loans under $125,000, no application fee and no prepayment penalties
Tax deduction options
Home equity loanInterest may be tax-deductible
HELOCInterest may be tax-deductible
How long does it typically take to get a home equity loan?
It normally takes 45 days to close on a home equity loan or home equity line of credit (HELOC). RBFCU will do everything we can to close the loan as soon as possible.
Is there a limit on how big my home equity loan can be?
The maximum amount for a home equity loan will depend on the value of your home and the balance of any other mortgages. The maximum loan to value is 80 percent.
Can I get a home equity loan on my vacation or investment property?
Texas has unique requirements for taking equity out of your primary residence homestead. The term “home equity” loans refers to lending on primary residences only. However, we may be able to assist you with a different product such as a cash-out refinance using your vacation or investment home as security for the loan. Contact one of our loan officers for additional information.
How do I know if my home equity loan is tax deductible?
You can consult with your tax advisor regarding which purposes may be permissible for tax deductions. Typically, mortgage interest payments are tax deductible, and your advisor will be able to tell you whether your home equity payments also qualify.
How do I pay off my home equity loan if I sell my home?
Upon the sale of your home, the proceeds or portion of the proceeds from the sale will be used to pay off the home equity loan.
Still have mortgage questions?
Total debts against the homestead, including HELOCs, are limited to 80 percent of the fair market value of the homestead. 30-year term only available for first liens. Borrower will be responsible for certain closing costs. If required, these closing costs may include title insurance, appraisal fee and survey costs. Hazard insurance is required. Home Equity Loans and HELOCs are subject to credit approval. Rates and terms are subject to change without notice. All RBFCU mortgage loans are available only on property in Texas. Home Equity loans and HELOCs are available on your primary residence only. As a safeguard, a 12-day cooling-off period is required by Texas law before Home Equity Loans or HELOCs may be closed. There is also a three-day right of rescission after closing before the funds may be disbursed. Minimum loan amount for a Home Equity Loan is $5,000. For HELOCs, a minimum $4,000 draw amount is required. No draws are allowed on a HELOC when the HELOC balance is greater than 50 percent of the fair market value of the homestead, as determined when the HELOC was originally granted (even if additional credit limit is available). HELOC Minimum Payment Requirements: Your minimum monthly payment will be calculated after each credit advance, and will be $14.00 per $1,000.00 of the outstanding balance after each advance rounded up to the nearest $1,000.00. Your payment amount will remain the same unless you obtain another credit advance. We will recalculate your payment each time you obtain an advance. Ex: a HELOC with $50,000 balance will require a $700 payment at the time of the draw ($50,000 balance ÷ 1,000 = 50 x $14 = $700). NMLS #583215.