Home Equity & Second Mortgages

What is a HELOC loan?
HELOC, or Home Equity Line of Credit, is a way to borrow money by utilizing the equity in your home. It is a variable-rate loan that acts like a credit card. The borrower is approved for a certain limit and can withdraw money when needed. Payments vary based on how much money is withdrawn and the current interest rate. There is a set term, and the outstanding loan amount must be paid in full by the end of the term.

If you use a HELOC to improve the home, you may be able to take a tax deduction on the interest for credit lines up to $1 million ($500,000 if married filing separately). If you use a HELOC for other purposes, you may be able to take a tax deduction on the interest for credit lines up to $100,000 ($50,000 if married filing separately). Be sure to talk to your tax advisor first to see if a HELOC is right for you!

What is a Home Equity Loan?
Similar to a HELOC loan, a Home Equity Loan allows you to borrow money using the equity in your home as collateral. Here are some of the features:

  • Lump Sum - a home equity loan is disbursed in one lump sum.
  • Fixed or Adjustable Rate - the interest rate you pay on a home equity loan can be either fixed (doesn’t adjust with the prime rate) or adjustable (adjusts with the prime).
  • Money for whatever - although many people use a home equity loan to pay for upgrades to their home, some use the money for college tuition, a vacation or to consolidate bills. Many times, the interest paid on home equity loans is tax deductible, but talk to your tax advisor first about your situation. 

Land of Lincoln Credit Union offers both fixed and variable home equity loans.

Variable-Rate Home Equity Loans from Land of Lincoln Credit Union:

Home Equity Line of Credit (HELOC Variable)

  • Available on primary, single-family residences.            
  • Offers a lower starting interest rate.
  • Advances can be made on line of credit for five years.
  • As long as 12 years to repay.
  • Variable rate is tied to the Wall Street Journal Prime Interest Rate.
  • A 2% annual adjustment cap.

Fixed-Rate Home Equity Loans from Land of Lincoln Credit Union:

Home Equity Line of Credit (HELOC Fixed)

  • Available on primary, single-family residences.
  • Advances can be made for up to five years.
  • As long as 10 years to repay.
  • Up to three draws allowed per quarter.

Second Mortgage Loan

  • Available on primary, single-family residences.
  • As long as 10 years to repay.

 Three-Year Balloon Loans

  • Available on primary, single-family residences.
  • Amortized over 20 years.
  • Refinanced every three years.

Ask a Member Service Representative for more information.