Not only can you get a home equity line of credit through most credit unions, you’ll likely find they offer several advantages compared to other types of financial institutions.
Over 145 million people in the U.S. belong to a credit union according to the National Credit Union Administration, so if you’re already a credit union member, it may be worth checking whether yours offers a home equity line of credit before looking elsewhere.
What Is a Home Equity Line of Credit?
A home equity line of credit, or HELOC, lets you borrow against the equity you’ve built in your home. Unlike a traditional home equity loan where you receive a lump sum after the loan approval, a HELOC gives you access to a revolving line of credit you can draw from as needed.
Having a revolving line of credit can be useful for expenses such as home improvements, major purchases, education costs, or consolidating higher-interest debt. Because your home secures it, you’ll find a line of credit generally has lower interest rates than many unsecured borrowing options (like a personal loan).
How Does a Credit Union HELOC Work?
A credit union HELOC works much like a HELOC from other financial institutions. For example, with Space Age CU, you apply for a specific credit limit based on factors such as your home's equity, income, credit history, and existing debt. Once approved, you can generally borrow, repay and borrow again during the draw period, up to your approved limit.
Each credit union offers its own terms, rates, and fees, so it's important to compare the details before choosing a lender. Each credit union should be able to explain its requirements, available terms, and how much you may be eligible to borrow.
What Are the Other Benefits of Getting a HELOC From a Credit Union?
Getting a HELOC through a credit union may come with several advantages, particularly for borrowers who prefer competitive loan terms and personalized service. Depending on the credit union, you may find benefits such as:
- Competitive interest rates: Credit unions may offer competitive rates on HELOCs, which can help reduce borrowing costs.
- Lower fees: Some credit unions may charge fewer or lower fees than other lenders, although costs vary by institution.
- Personalized service: You may have the opportunity to work directly with a lending professional who can answer questions and explain your borrowing options.
- Member-focused lending: Because credit unions are member-owned financial cooperatives, they may place an emphasis on providing products and services designed around members' financial needs.
Frequently Asked Questions
Do all credit unions offer HELOCs?
No. While many credit unions offer home equity products, available products and eligibility requirements vary. Check with your credit union to see whether it offers HELOCs.
How much can you borrow with a home equity line of credit through a credit union?
The amount you can borrow depends on factors such as your home's value, existing mortgage balance, income, credit history, and the credit union's lending requirements.
Are Credit Union Home Equity Lines of Credit Rates Competitive?
Credit union HELOC rates can be competitive compared to those offered by other financial institutions and lenders, since credit unions are member-owned financial cooperatives and often return their earnings to members.
If you’re curious what a home equity line of credit could look like for your finances, reach out to the lending team at Space age Credit Union to find out more.
