Home Equity: What Is It & How To Use It?

May 21, 2020, 14:27 PM

Metro Credit Union is doing everything possible to help you get through these challenging times. One way to cover projects, bills, and unexpected expenses is through your home’s equity. With our Home Equity Line of Credit, you can borrow up to 90% of your home’s value with fixed rates as low as 1.99% for 60 months.

What is a Home Equity Line of Credit?

Home equity lines of credit (HELOCs) are collateralized loans that allow the borrower to access capital “locked up in” homes, which are usually by far the largest asset people own. These are primarily for borrowers who have repaid all or the majority of their mortgages and need cash but don’t want to sell their homes. Do you have equity? Will you need extra funds beyond the original amount you are borrowing? A home equity line of credit allows you to borrow additional money as you need it.

Generally, you can’t borrow more in total between mortgages and home equity loans and lines of credit than 80 percent of the value of your home. For instance, if your home is worth $160,000 and you’ve borrowed $150,000, you only have 6.25 percent left of your home price. You would have to owe less than $128,000 to borrow anything. At Metro Credit Union, we do offer products that could allow you to borrow up to 110% of your home’s value.

The lender may require an appraisal to prove your home’s value, which may range in complexity from a simple internet search all the way up to an appraiser coming out to certify the value of your home.

How does a HELOC affect your Credit Score?

Lenders look to your credit score as an indicator of the likelihood that you will pay back your loan. A lender will also use your credit score to determine the interest rate on your loan. When it comes to your mortgage, in the short term your score may decrease due to a hard pull; however, with regular on-time payments, you demonstrate responsibility by handling different types of debt. The impact on your credit score would be low. You can check your credit score on Metro’s online banking.

Take the next steps to secure a special home equity line of credit:

  • Apply online, over the phone, or in-person with an appointment.
  • Fast application turnaround with competitive rates.
  • Finance up to 90%-110% Loan to Value (LTV).

Metro Credit Union in Omaha, Nebraska

Give us a call at 402-551-3052 and be thrilled at just how low your payment can be. Our Personal Bankers can find the home equity loan that's right for you and give you quotes on current interest rates and closing costs. It may be hard to choose the right tile for your new bathroom or right cabinets for your kitchen, but finding the right HELOC lender is easy. During these times of uncertainty, you can trust Metro Credit Union to do what’s right. We are your local advantage.

HELOC Spring Low As 1.99% APR from Metro Credit Union on Vimeo.

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