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Home Equity FAQ

What is a Home Equity Loan?
A Home Equity Loan uses a portion of the value of your primary residence, above what you owe on your existing mortgage, as security for a loan.
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How do I calculate the amount I have available for a home equity loan?
To determine the amount available for a Home Equity Loan, take your homeís appraised value or tax assessment and multiply by 80%, 90%, or 100% (the loan to value ratio), minus any outstanding liens, that figure equals the potential loan amount.

For example, letís say youíve had a mortgage on your home of $100,000 for 10 years and have paid down the principal to $60,000. In the 10 years you have owned your home, property values in your area have increased and now your home is worth $125,000. In this particular example, you would be able to borrow up to $52,500 using your home as security for the loan.

Donít understand how? Letís take a look:
Appraised value of home:

†$125,000

Multiply by 90% (loan to value ratio): ($125,000†x .90)

†$112,500

Less the remainder of the 1st mortgage:

- $ 60,000

Equals:

$ 52,500
in available equity


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What is the repayment term on a Fixed Rate Home Equity loan?
You can finance your loan for either 5, 10, or 15 years.
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What is the maximum loan to value ratio?
The maximum loan to value ratio is 100%.
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What type of home equity loans does the credit union offer?
The credit union offers two types of home equity loans. The first is a Home Equity Line of Credit, also known as HELOC. The second type is a Fixed Rate Home Equity Loan, also known as a Second Mortgage, with repayment terms of 5, 10, or 15 years.
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What type of property is eligible for a home equity loan?
Home equities are available for a 1 to 4 family residential unit, which is owner occupied as a primary residence. The credit union does not offer home equity loans on a property that is being purchased on contract.
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What is the minimum and maximum loan amount on a Home Equity Line of Credit?
The minimum loan amount is $10,000 and the maximum loan amount is $150,000.
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What is the minimum and maximum loan amount on a Fixed Rate Home Equity Loan?
The minimum loan amount is $5,000 and the maximum loan amount is $75,000.
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How long does it take to process a home equity loan?
It normally takes approximately 1 to 2 weeks, depending on several things, for example, if an appraisal is necessary.
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Do I have to pay any fees to get a home equity loan?
There are no up front fees. Closing the account within two years of opening it will trigger a reimbursement cost of all closing fees incurred by the credit union.
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Are there any annual fees associated with any of the home equity loans?
No, we do not have any annual fees.
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Do I have to get an appraisal done on my property?
The credit union may use the most recent tax assessment in order to determine value, an online appraisal source, or may require a full appraisal of the property depending on loan amount and qualification criteria.
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Does the credit union service their home equity loans?
Yes, we do service our home equity loans.
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Can I get a discount on my interest rate for using payroll/automatic deduction or for having an Illini Advantage or Illini Advantage PLUS checking account?
Unfortunately, interest rate discounts cannot be given on real estate loans.
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Does the Home Equity Line of Credit have a fixed interest rate?
No, the Home Equity Line of Credit is a variable rate loan subject to change monthly.
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How is the interest rate calculated on a Home Equity Line of Credit loan?
The interest rate is based on the Prime Rate plus a margin. See the Disclosure section on our Home Equity Loan Rates page.
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Is there a maximum the interest rate can reach on a Home Equity Line of Credit?
Yes, the maximum interest rate is 18%. Your rate cannot change more than 2% per adjustment.
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Is there a minimum advance amount on your Home Equity Line of Credit loans?
Yes, your first advance has to be for at least $1,000 and each advance thereafter at least $500.
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How do I access my Home Equity Line of Credit?
There are several ways you can access money from your home equity loan. The easiest and fastest way is to login to I-Branch and transfer money from your Home Equity Line of Credit to your savings or checking account. You may also call the credit union to request an advance. Please call at least 24 hours ahead of the time you'll need the funds, so that we can transfer the money into your account, mail you a check, or you can pick up a prepared check. Another option is to write a share draft, which draws directly from your Home Equity Line of Credit. These checks can be provided to you upon your request and must be written for a minimum of $500.
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How many advances can I take on a Home Equity Line on Credit?
The number of advances is unlimited, up to your available credit limit.
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What is the amortization period on your Home Equity Line of Credit loans?
The maximum term is 240 months, (20 years).
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How long can I use my Home Equity Line of Credit?
Depending on the type of Home Equity Line of Credit, the first half of the term you may take advances and the second half is reserved for repayment.

80 to 90% Loan to Value Home Equity Line of Credit loans are set up for a 20 year repayment. You can take advances on the line of credit for the first 10 years. The last 10 years of the loan is reserved strictly for repayment.

100% Loan to Value Home Equity Line of Credit loans are set up for a 10 year repayment. You can take advances on the line of credit for the first 5 years. The last 5 years of the loan is reserved strictly for repayment.
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How is the interest rate determined on a Fixed Rate Home Equity loan?
The interest rate is based on the loan to value ratio and the repayment term chosen. See the
Home Equity Rates for more details or call the credit union.
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What is the repayment term on a Fixed Rate Home Equity loan?
You can finance your loan for either 5 or 10 years.
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