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Are you struggling to pay for your child’s college tuition? Or are you dreaming of flying to your dream vacation destination? Do you need cash for your business expansion? Look no further than MECU’s HELOC – the ultimate solution for unlocking the fun while saving on interest rates.
What is a HELOC?
A HELOC or a home equity line of credit is a revolving line of credit secured by your home. It’s like a credit card that’s secured by your home, which means the interest rates are much lower than that of a credit card.
Think of a HELOC as a savings account with low-interest rates. You only pay interest on the amount you withdraw, not the entire loan amount.
What is MECU?
MECU is a credit union provides financial services for its members. MECU’s mission is to provide its members with financial freedom and ease by providing competitive interest rates and unparalleled services.
MECU stands for “Money Extremely Carefully Used.” The pun-tastic name is fitting, as this credit union places a strong emphasis on their members’ financial health.
What makes MECU HELOC different?
There are numerous banks and credit unions that offer HELOC. Still, MECU’s HELOC has several advantages that make it stand out from the competition, which includes:
Low-interest rates
MECU offers competitive interest rates that cannot be matched by other financial institutions. Lower interest rates mean that you save more money in the long run.
Flexible payment terms
MECU offers flexible payment terms ranging from five to 20 years. This flexibility provides you with options on how to pay off your loan, depending on your financial goals.
No closing costs
Unlike other financial institutions, MECU offers HELOC without any closing costs associated with the loan. This means you start saving right from the start.
Easy Application process
MECU’s application process for HELOC is simple and straightforward. In just a few minutes, you can fill out the application form and have the money you need to start having fun.
How does HELOC work?
HELOC is essentially like a credit card but uses your home equity as collateral. The credit limit is based on your credit score, your income source, the value of your home, and the amount you owe on your mortgage.
The credit limit for HELOC is determined by a specific formula. First, take the appraised value of the home and the outstanding balance on the mortgage. Then, subtract that amount from 80% of the property’s assessed value. That will give you the maximum amount that you can withdraw under HELOC.
Every time you withdraw funds from your HELOC account, your credit limit decreases. When you repay the principal balance along with the accrued interest, your credit limit increases.
Here’s an example to help you wrap your head around the concept.
Assessed value of the home = $300,000
The outstanding balance on mortgage = $100,000
Credit limit under HELOC = ($300,000 x 80%) - $100,000 = $140,000
Why use MECU HELOC instead of other loans?
There are several benefits to using a HELOC, especially MECU’s HELOC, over traditional bank loans. Here are some undeniable benefits:
Lower interest rates
As mentioned earlier, the interest rates on a HELOC are much lower than traditional bank loans, such as personal loans or credit cards. This means you pay less interest in the long run.
Tax-deductible interest
The interest you pay on HELOC is tax-deductible. That could be a significant tax break if you’re using the funds for home improvements, such as a kitchen renovation or a new roof.
Versatility
Unlike traditional loans, HELOC can be used for many purposes, such as home improvements, educational expenses, emergency expenses, or vacations. HELOC provides you with the ultimate flexibility in financing options.
Who qualifies for MECU’s HELOC?
To qualify for a HELOC from MECU, you must meet specific eligibility criteria. However, MECU’s eligibility requirements are flexible and more accessible than traditional banks.
MECU looks at your creditworthiness, income source, and value of your home when you apply for HELOC. The credit union also factors in your repayment capability before extending the line of credit.
What are the costs involved in MECU’s HELOC?
When you apply for HELOC from MECU, you incur the following costs:
Annual fee
MECU charges an annual fee of $60 for HELOC.
Early closure fee
If you close your HELOC account within three years of opening the account, MECU charges an early closure fee of $750.
Late payment fee
If you fail to pay the minimum due by the due date, you will incur a late payment fee of $35 or Compute at 5%.
What are the benefits of MECU’s HELOC?
Apart from the competitive interest rates and flexibility in payment terms, MECU’s HELOC offers other benefits such as:
Home Equity Rates
MECU offers competitive interest rates for mortgage and HELOC. This means you can refinance your current mortgage and get a lower interest rate.
Mobile banking
MECU provides mobile banking, which means you can manage your account on the go.
Loans
Apart from HELOC, MECU offers various loans catering to the financial needs of its members.
Conclusion
If you’re looking for a versatile and flexible source of funding, HELOC is the answer. With MECU’s HELOC, you not only enjoy competitive interest rates but also unlock the fun with punny savings.
Unlock the fun with MECU HELOC and enjoy the vacation you’ve always dreamed of, or pay for your child’s tuition without breaking the bank. Remember, you work hard for your money, let MECU help you make the most of it.
Helpful Table
| Criteria | Range |
|---|---|
| Minimum credit score | 660 |
| Maximum loan-to-value | 80% |
| Minimum loan amount | $10,000 |
| Maximum loan amount | Subject to appraisal |
References
[1] https://www.thebalance.com/what-is-a-home-equity-line-of-credit-315670
[2] https://www.investopedia.com/articles/pf/09/home-equity-options.asp
[3] https://mecu.com/money/heloc
[4] https://www.ncua.gov/analysis/Pages/cs-report-2021-Q1.aspx
[5] https://www.mybanktracker.com/blog/personal-finance/mecu-federal-credit-union-review-313610