| | Home Equity Loan | Home Equity Line of Credit (HELOC) |
|---|
| Product | Fixed-rate, closed-end loan with equal payments over the term of the loan | Open-end variable rate loan, interest-only payments in 5 year draw period followed by a 10 year repayment period to repay the outstanding balance |
| Recommended for: | Members who need a fixed amount, do not anticipate needing additional funds, and prefer a fixed rate and payment. | Members who are not sure what amount they want to borrow, anticipate needing various advances over an extended period of time, want the flexibility of accessing the funds when they need them and prefer a variable rate. |
| Payments | Equal monthly installments over a fixed period of time, terms vary from 3 to 15 years | First 5 years during the draw period, payments are equal to the greater of interest only or $25. After the draw period payments are substantially equal monthly installments over 10 years |
| Terms | 3 years to 15 years, varies based on loan amount | 5 year draw period, followed by 10 year repayment period |
| Loan to Value | 80% of Fair Market Value, less any outstanding home liens | The line of credit can never exceed 50% of the Fair Market Value. All liens plus the HELOC on the home may not exceed 80% of the fair market value of the home. |
| Funds Distribution | Funds are disbursed in one lump sum at closing | Available funds can be accessed any time during the draw period |
| Minimum Advance | One-time lump sum request based on loan amount | Advances must be at least $4000, there is no minimum or maximum number of advances |
| Tax Deductible Interest | Interest may be tax deductible. You will need to contact your tax advisor | Interest may be tax deductible. You will need to contact your tax advisor |
| |  Click Here to Learn More | Click Here to Learn More |
