Home equity is the portion of your home's value that you own. Home equity is calculated by subtracting any outstanding mortgage balance from the current market value of your home.
Your home’s equity will grow as you make your mortgage payments. You can access this equity through applying for a home equity loan or home equity line of credit (HELOC). Both options can help you pay for significant expenses, like home improvement and debt consolidation.
Borrow up to 80% of the value of your home for pretty much any purpose.
The best use of these affordable funds? Really, the sky's the limit. Everything from college costs and tropical cruises to medical bills and major purchases is fair game. Our friendly lending team can help you decide whether upfront cash or an easy-access loan fund might best suit your needs.
Both types of financing are secured by the equity in your home, which is the value of your home minus the amount you owe on your mortgage. Because your property serves as collateral, both options can provide larger loan amounts and lower interest rates compared to unsecured options like personal loans and credit cards.
The key difference has to do with when you get the funds.
A HELOC is a revolving line of credit that lets you borrow more than once. You can draw from this credit line at any point during your 10-year draw period (the borrowing period). As you pay down your balance, your available credit goes back up to let you borrow more. After your draw period ends, you repay all principal and interest in monthly installments (based on how much you borrowed). Many homeowners choose a HELOC because it gives them the flexibility to borrow money when needed, like a credit card, and they only pay interest on the funds they use. Most HELOCs have a variable interest rate, which can go up or down based on the market.
A Fixed Home Equity Loan, on the other hand, provides all your funds at once. While this loan provides less flexibility than a HELOC, it gives you a fixed interest rate that won’t go up, along with predictable payments, so you’ll know in advance how much money you will need to pay back.
The time it takes to close on a HELOC can vary, but many borrowers get theirs within just a few weeks. Here at Suffolk Credit Union, we process applications and make loan decisions locally, which helps us provide a quick, convenient process for our members.
Once your Home Equity Line-of-Credit has been approved, your HELOC will appear as an account within Suffolk Credit Union's Online Banking. It’s easy to draw from your credit line by making an Account-to-Account transfer from your HELOC to your Suffolk Credit Union checking account. You can also make purchases directly from your HELOC using the convenience checks that we will provide.
A number of criteria will be used to determine your approved loan amount, including your income, employment status, and credit score.
One key factor will be how much equity you have in your home. At Suffolk Credit Union, you can access up to 80% of the appraised value of your home, minus your outstanding mortgage.
Here’s an example. If your home is valued at $400,000, 80% would be $320,000. If your current mortgage balance is $100,000, then subtracting that amount will show how much home equity you could borrow against: $220,000.
Please note that our Home Equity Line-of-Credit is available in amounts up to $1,500,000.
Our HELOC interest rate is based on the Wall Street Journal Prime Rate plus a margin (as determined by your creditworthiness). Rate information will be shown on your loan documents. Like other open-ended loans, your Suffolk Credit Union HELOC has a variable interest rate that may change monthly. If you are concerned that rising interest rates may increase your monthly payments, consider taking advantage of our HELOC’s Fixed Rate-Lock Option during your draw period (see below).
During your draw period, you are only required to make a minimum payment that is equal to the finance charges (interest) that accrued on your HELOC balance during the preceding month. When you begin the repayment period after 10 years, you can no longer draw additional funds from the credit line, and you will pay off your remaining balance in monthly payments of principal and interest over 20 years.
Please keep in mind: If you were making minimum (interest-only) payments during your draw period, your payments will be significantly higher after the draw period.
Yes! Our Home Equity Line-of-Credit offers a special Fixed Rate-Lock Option that gives you the ability to draw up to three fixed-rate loans at a time, in amounts of at least $10,000, during the draw period. This option allows you to borrow a specific amount that is charged a fixed interest rate instead of a variable rate.
This option could help you save money down the road by protecting against rising interest rates. Borrowers often use this option to borrow money for a specific purpose, such as a home project or debt consolidation.
No additional application or fees are required to use the Fixed Rate-Lock Option. To draw from your HELOC using our Fixed Rate-Lock Option, simply call our Contact Center or visit your local branch. To be eligible to use the Fixed Rate-Lock Option, you must be current on all your Suffolk Credit Union loans (i.e., not behind on any payments).
No, a Home Equity Line of Credit (HELOC) doesn't necessarily have to go through your mortgage company. While some mortgage lenders offer HELOCs as part of their services, you can also obtain a HELOC through banks, credit unions, and other financial institutions. It's essential to shop around and compare terms and conditions to find the best option that suits your needs and financial situation.
Take your money as a lump sum of cash.
The difference between a home equity loan and a home equity line of credit (HELOC) is the way you access your home equity.
A home equity loan provides a lump sum of money upfront, whereas a HELOC gives you access to a revolving line of credit during a specific draw period.
Our home equity loans have predictable monthly payments, making them a great option for funding major purchases, consolidating high-interest debt, and other situations where you know exactly how much money you need and when.
With an SCU home equity loan, you can borrow up to 80% of your home’s appraised value. We also offer competitive fixed rates and repayment terms up to 10 years.
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* APR = Annual Percentage Rate. Rates reflect automatic payment discount of 0.25%. Introductory APR is based on your creditworthiness and will range from 5.99% to 8.99% APR. Lines up to $100,000 require minimum $15,000 initial advance and maintain a balance of $10,000 during the time period in which the introductory rate is offered to maintain that introductory rate; lines between $100,000.01 and $250,000 require a minimum $35,000 initial advance and maintain a balance of $25,000 during the time period in which the introductory rate is offered to maintain that introductory rate; and lines between $250,000.01 and $1,500,000 require a minimum $65,000 initial advance and maintain a balance of $50,000 during the time period in which the introductory rate is offered to maintain that introductory rate. After the 15 month introductory period, APR is based on the Prime Rate as published in the Wall Street Journal plus a margin which is based on your creditworthiness. The minimum rate is 3.00% APR and the maximum rate is 18.00% APR. The HELOC is a variable rate loan. After the introductory period the APR may change monthly. Making minimum payments only may result in a balloon payment. Non primary resident properties will get an increase of 3% to the intro rate.
**Suffolk Credit Union will pay closing costs on Home Equity Loan amounts up to $250,000 on primary residences located in New York State only. Suffolk Credit Union will pay closing costs, except the appraisal fee, on Home Equity lines-of-credit amounts up to $500,000 on primary residences in New York State only. For Jumbo HELOCs on primary residences, the borrower pays for title insurance and the mortgage tax on the amount over $500,000. The member is responsible for all closing costs on secondary and investment properties and all properties located outside of New York regardless of the amount of the loan. If you pay off and close your loan less than 36 months from loan origination date, you will be required to reimburse all closing costs paid by Suffolk Credit Union. For a Home Equity Line-of-Credit: Minimum loan amount is $20,000. Maximum loan amount is $1,500,000. The length of the repayment period will depend on the balance at the time of the last advance you obtain before the draw period ends. Monthly payments required during both the draw and repayment periods. During the 10-year draw period your minimum monthly payment will equal the finance charges (interest) that accrued on the outstanding balance during the preceding month. Payment calculation is based on 20-year amortization. Hazard insurance is required. Available on 1–4 family primary or secondary residences, excluding mobile homes, co-ops and homes for sale, under construction or on leased land. Applicants who are not approved at these rates may be offered credit at a higher rate.
Rates and terms are subject to change without notice. All offers of credit are subject to credit approval requirements and applicants may be offered credit at higher rates and other terms. Loan-to-Value (LTV) and/or Combined LTV (CLTV) restrictions apply. Available on 1- to 4-family primary or secondary residences, excluding mobile homes, co-ops and homes for sale, under construction or on leased land. Hazard insurance is required on all loans secured by real property (flood insurance may also be required where applicable). Membership at Suffolk Credit Union is required by opening a minimum $5 share savings account at or prior to HELOC account opening.
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