Why should I get a HELOC*?

Published February 1, 2021

Reasons to get & use a HELOC

There are multiple reasons why somebody might want to access funds that are made available from a HELOC. Ultimately, you can use the funding from a HELOC for anything you choose! A lot of people utilize the funds to build their outdoor oasis, adding pools or putting in outdoor kitchens and creating something that they can enjoy. One thing that a lot of people use them for is doing some debt consolidation. Credit card debt can creep up on you and before you know it those debts have increased, and the rates on credit cards can be quite high. As most of you know those rates can be 17-25%. With a line of credit you can lower your rates, get your debts paid off more quickly and get yourself in a better financial situation.

Key Takeaways

  • Debt consolidation, home remodeling and paying college tuition are popular reasons to get a HELOC

  • The funds from a HELOC can be used for anything you want!

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*Fixed rate home equity line of credit: Loan has a draw period of 10 years, followed by a repayment period. Interest only payments during the 10-year draw period and will be re-amortized at the time the repayment period begins. If interest only payments are made during the draw period, the loan balance will not decrease.

Variable rate home equity line of credit: Credit Union of Texas offers a variable Annual Percentage Rate (APR) based on the Prime Rate as published in the Money Rates section of The Wall Street Journal (the “Index”) plus a margin based on creditworthiness and credit limit. As of July 27, 2023, the index value is 8.50% . The floor APR will be 3.00%. An increase in the Index will result in an increase in the periodic rate which, in turn, will result in higher payments. In no event, will the APR increase by more than 18% or the maximum rate allowed by applicable law.

The minimum advance during the draw period is $4,000. Property insurance is required, including flood insurance where applicable. Texas homestead properties are limited to 80% combined loan to fair market value for home equity financing. All loans are subject to credit approval and Credit Union of Texas lending policies. Other restrictions may apply. In Texas, there is a 12-day cooling off period on all HELOCs. There is also a three-day right of rescission after closing before the funds may be disbursed. Actual time of funding may differ depending on appraisal, title and other underwriting requirements. This is a limited time offer and is subject to change at any time without notice. The account is subject to application, credit qualification, and income verification; additional evaluation and verification criteria may apply. CUTX home loan programs are only available in Texas. Credit Union of Texas NMLS #576560. Membership required.