Skip to main content
Home - Emporia State Federal Credit Union

Mortgage Education

HOUSING LIBRARY

Home Equity Lines of Credit (HELOC)

A home equity loan is a powerful tool for homeowners. It allows you to borrow money against the equity in your home which can be used for any project or purchase: repairs or upgrades, college tuition, or to pay off high-interest debt. Often, the interest rates on home equity loans are lower than credit cards, which makes it easier on your bottom line.

The amount of a home equity loan is based on how much equity – the difference between the value of the home and how much is owed on the mortgage(s) – the homeowner has, and current credit qualifications. The longer a mortgage is paid down and the more a home appreciates in value, the more equity is built which can equate to a larger loan amount.

ESFCU offers competitive, fixed-rate home equity loans as well as open-end, variable-rate lines of credit (HELOC**) that are available for use when you need it. In addition to low interest rates, the interest may be tax deductible.+ Consult your tax advisor for details.

When is an Adjustable-Rate Mortgage a good option?

Adjustable-Rate Mortgages (ARMs) begin with a fixed interest rate and then adjust up or down after the initial term.  ARMs are a good option for buyers who don’t plan to stay in their home for more than 5 years and want to keep their monthly payment low.  

ARM products contain 2 numbers:

  1. The first refers to the number of years the interest will remain fixed.
  2. The second is the number of years between interest rate changes after the initial term expires.
    1. For example, a 5/5 ARM would have the same interest rate for the first 5 years, and then the rate would adjust every 5 years after that.