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Home Equity Line of Credit

CS Credit Union offers a Home Equity Line of Credit for primary and secondary residences in the state of North Carolina. A home equity line of credit is a secured open end loan (usually second mortgage) that allows the member to borrow against the value of the equity. You may obtain credit advances for up to 15 years, which is referred to as the draw period. After the draw period ends, the repayment period will begin. The length of the repayment period will depend on the balance at the time of the last advance before the draw period ends. You will be required to make monthly principal and interest payments during both the draw period and the repayment period. Each time a credit advance is obtained, a payoff period of 180 months will be used to calculate your payment. The minimum advance on the equity line is $100 and the minimum monthly payment is $100.

You may borrow up to 80% of the value of your home or secondary residence. If the home equity line of credit is subordinate to another mortgage loan on the residence, the maximum loan amount is $100,000. Below is an example of the determination of the potential equity in your residence.

Approximate Property Value $ 100,000
  X .80
SUBTOTAL $ 80,000
Less First Mortgage Loan Balance $ 50,000
Estimated Credit Line Available $ 30,000
Minimum Monthly Payment @ 9.25% APR* $ 309

Variable Rate Feature

The minimum interest rate, floor, is 6.00% APR*, while the maximum interest rate will never exceed 18.00% APR*. The Annual Percentage Rate can change annually on the first day of January, April, July and October. The maximum increase during any one year period is 1.00% above the initial rate or the most recent adjusted rate. The Annual Percentage Rate cannot increase more than 12.00% above the minimum Annual Percentage Rate. The Annual Percentage Rate is based on the value of an index. The index is the Prime Rate published in the Money Rates column of the Wall Street Journal. When a range of rates has been published the highest rate will be used. We will use the most recent index value available as of 30 days before the date of any annual percentage rate adjustment. The current index value and annual percentage rate will be provided when you open a home equity line of credit and on periodic statements that you will receive.

Tax Deductibility

Most interest paid on first and second mortgage loans is tax deductible on itemized tax returns. You should consult a tax advisor for information regarding the deductibility of interest and charges.

Processing Fees

Fees and charges to open your home equity line of credit may apply and generally range from $600 to $1,400. Information on fees is provided upon request.

*APR = Annual Percentage Rate

For more information, the Consumer Financial Protection Bureau has provided a booklet:

The following link will open a PDF document in a new tab.
'What You Should Know About Home Equity Lines of Credit'

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