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Home Equity Loans
The first step in determining whether or not a Home Equity Loan would be to work out how much equity (roughly) you have one your home. Follow these steps:
- Write down the appraised value of your home
- Multiply that by 80%
- Subtract all the balances on your mortgage and other home equity loans from this figure.
- The result is roughly what you can borrow on your home
If your estimated amount to borrow is less than $10,000, you would not qualify for a Home Equity Loan. The purpose of Home Equity Loans is to help you make a big one-time purchase of lasting value, such as paying for a child’s college education or consolidating large amounts of credit card debt.
Another consideration would be to consult with a tax professional to find out if you can deduct the interest and charges from your taxes. If not, a Home Equity Loan would be of little value to you unless the rate was incredibly low.
One of the most important points to consider is that you are using your home as collateral on a contractual obligation. You are less likely to lose your home with a Home Equity Loan than with other types of home-secured loans such as a mortgage, but the reality remains that you could lose your home if you fail to make payments or violate other terms on your loan.
For a Loan application packet please call the credit union at (713) 473-9244 or to apply in person, bring the following materials to either credit union location.
The following documents are REQUIRED to process the loan:
- Executed credit application
- Current pay stub (last two (2) years tax returns if self-employed, retired, or income is from commissions)
- Mortgage statement(s) to show current mortgage loan balances and payments
- Most recent tax appraisal or tax statement
- Deed of trust
- Proof of Homeowners Insurance
Additional Home Equity requirements:
- Property must be homestead
- A borrower may obtain only one equity loan at a time
- An equity loan may not be financed more frequently than once a year
- There is no pre-payment penalty
- Loan closings must occur in the office of the lender, title company or Attorney
- Origination fee of 3%
- Closing documents MAY NOT be executed before the 12th day after the lender received an executed credit application and Notice concerning extensions of credit
- There is a 3-day Right of Recession period after the loan documents are signed before loan proceeds will be distributed (Sundays and legal holidays excluded)
- Appraisals will be required on loan amounts of $25,000 or greater
- Flood determination required
- All fees that are accrued due to this loan are covered in the 3% origination fee
The credit union is an Equal Housing Lender. We do business in accordance with Federal Fair Lending Laws.