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Financial Wellness
When It's Time to Tap Your Home Equity
CEFCU offers many types of real estate products — all carried out by our own Credit Union employees. What this really means is by doing our own loan processing and funding, we can better provide you with the quality service and pricing that you expect from your Credit Union!
Every step of your home loan process is handled with personal care and attention. And you can be assured that there will be no unexpected tricks or gimmicks to surprise you throughout your real estate borrowing experience.
Smarter Solution for Your Real Estate Borrowing Needs
With two unsurpassed Home Equity Lines of Credit to choose from — our Traditional HELOC and our 10-Year Interest Only HELOC — one of the most common questions at CEFCU is, "Which one?"
Remember, we are here to help with any questions or concerns. If you're not yet a home owner, check out our article on choosing a home loan.
Why Steve and Bonnie chose our 10-Year Interest Only HELOC
Steve and Bonnie were in their late 50's with an eye towards retirement. They had a lovely home in the hills of Los Angeles, with a large amount of equity. But they were ready for a change.
So when they found a quiet year-round vacation home in the mountains, they dreamed of retiring there. They wanted to buy it now…while rates were low. But they did not have enough cash to make a down payment and then support two mortgage payments. And retirement was still 7 or 8 years away. So instead, they found a smarter solution: our 10-Year Interest Only HELOC.
This line allowed them to tap $300,000 from the equity in their L.A. home and buy their dream retirement home outright. The repayment of this home equity line was based on only interest for 10 years.
At the current variable rate of 3.75% APR, their monthly payment would be just $955.48.
At the end of 10 years, Steve and Bonnie will still owe the entire principle of the loan — a balloon payment of $300,000. But this does not concern them, since they will be selling their L.A. home before the end of the 10-year term, enabling them to pay off the entire $300,000 HELOC.
They will retire mortgage-free. And in the meantime, they can rent out their future retirement home for more than their monthly loan payment!
Why Alice chose our Traditional HELOC.
Alice was a 40-year-old single mother, determined to help her 17-year-old son go to college. She earned a good living as a nurse, but not enough to save up for the enormous expense of college.
Most of her money was tied up in the equity in her home, which she had owned for 12 years. But unlike Steve and Bonnie, she had no plans to sell it any time soon, and she had no way of dealing with a balloon payment in 10 years.
So, Alice chose a Traditional HELOC with a credit line of $100,000. This will allow her to draw on it every semester as she needs to, repaying both principle and interest each month. And her payments are based only on what she uses.
How does your story compare?
Find out why CEFCU is a smarter solution to all your real estate borrowing needs. Our dedicated Real Estate Lending team is ready to help you through our full range of programs.
Visit our online Real Estate Loan Center for useful for useful features to help you understand your options, estimate payments and compare rates and terms.
$1,000 processing fee is waived on new money loans or refinanced loans from another financial institution. Property insurance is required. Rates are variable and maximum Annual Percentage Rate is 18% on the 10-Year Interest Only HELOC and 14% on the Traditional HELOC.
Current CEFCU rates can be found on our Real Estate Loan Center. Real estate loans are available only for residential properties in the state of California. Certain exceptions may apply for jumbo loans or property types. Property insurance is required. All loans subject to credit approval. Rates and terms are subject to change without notice. CEFCU is an Equal Housing Lender. NMLS #626590.
