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Home Equity

Home Equity Line of Credit also referred to as a HELOC allows you to convert your home’s equity into a line of credit that can be used as needed for ongoing expenses — Since a HELOC is a separate loan, you can keep the great low rate you already have on your mortgage loan!

Having a HELOC1 is great for emergencies because you have a safety net for unexpected expenses. A HELOC can even save you money since the rate is lower than most credit cards.

  • Great for ongoing expenses like remodeling your home, paying for college tuition, and handling unexpected expenses
  • Offers flexibility, only use as needed
  • Payments vary and are on amount drawn and a variable interest rate
  • 5-year draw period and 15-year repayment period
  • Borrow up to 80% of your home’s appraised value 
  • No annual fee
  • Interest may be tax deductible. Consult a tax advisor for details.

How does a HELOC work?

A HELOC works similar to a credit card that allows you to borrow against your available limit as often as needed. Additionally, a HELOC gives you the flexibility to borrow against your home’s equity.

For example, say you have a home worth $300,000 with a balance of $150,000 on your first mortgage and you want to access up to 80% of your home’s value (based on Combined Loan To Value – CLTV) stats. You can establish a HELOC with up to a $90,000 limit:

  • Home Value at $300,000 x 80% = $240,000.
  • 80% minus what you owe is $240,000 – $150,000 = $90,000.
  • $90,000 would be the amount you could use, for this 80% CLTV example.

What can I use a HELOC for?

Once you qualify for a certain limit and your loan is closed, you can use the funds for things such as: home improvement, debt consolidation, medical bills, education and even a vacation.

All you have to do to access the funds is transfer the funds to an affiliate account or come to a branch.

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1APR=Annual Percentage Rate. Home Equity Lines of Credit have variable rates. Subject to credit approval, your amount may vary based on credit qualifications. Not all borrowers will qualify. Rates are subject to Lender’s credit criteria, certain conditions, and restrictions. Rates are subject to change without prior notice. The variable Line of Credit rate is set at the time of your loan (your initial rate) and adjusted on a semiannual based on the Prime Rate as published in The Wall Street Journal, plus a margin as low as +.50% on Home Equity Lines of Credit (your margin may differ based on your qualifications). Available on Virginia residences only. Late payment fees and processing fees may apply. **Minus any balances owed. Your amount may vary based on credit qualifications.