Home Equity Loan & HELOC FAQ

• Are there any restrictions on how I can use my HELOC funds?

  Some lenders may restrict how you use HELOC funds, such as prohibiting speculative investments or gambling-related expenses.

• Can I have multiple home equity loans or HELOCs on my property?

  Yes, you can have more than one home equity loan or HELOC, but it depends on your lender and the amount of equity available in your home. The number of existing loans already secured by your home will also affect eligibility.

• Can I refinance my Home Equity Loan or HELOC to get a better rate?

  Yes, refinancing your Home Equity Loan or HELOC may help you secure a lower interest rate or better terms.

• Can I use a Home Equity Loan or HELOC to pay off my mortgage?

  Yes, you can use a Home Equity Loan or HELOC to pay off your mortgage, but it is essential to compare interest rates and loan terms before doing so.

• Can I use a Home Equity Loan or HELOC to purchase another property?

  Yes, a Home Equity Loan or HELOC may be used to purchase an investment or second property.

• Can I use my home equity for college tuition or other educational expenses?

  Yes, many homeowners use their home equity to pay for college tuition, but it's important to compare interest rates with student loans.

• Can I use my home equity funds to start a business?

  Yes, you may use your home equity funds to start a business, but it's important to consider the risks involved with using your home as collateral.

• Can I use my Home Equity Loan or HELOC for home renovations?

  Yes, home renovations are one of the most common uses for Home Equity Loans and HELOCs.

• Do I need an appraisal to qualify for a Home Equity Loan or HELOC?

  Yes, many lenders require an appraisal to determine your home's current market value before approving a Home Equity Loan or HELOC.

• How do HELOC interest payments work, and when do I start repaying the principal?

  During the draw period, you may only be required to pay interest. After the draw period ends, you begin repaying both principal and interest.

• How do I apply to refinance my home equity loan?

  Your home’s equity can help you finance large purchases, pay for repairs or remodels, and even send the kids to college. Kitsap Credit Union has made accessing your home’s equity simple and straightforward by offering either a fixed rate closed-end Home Equity Loan or a Home Equity Line of Credit to meet your needs.

  You can apply for almost any type of loan, 24 hours a day, and 7 days a week on our online application center.

  Apply now! 

  Here's what you will need to apply for a loan.

  • Social Security Number (SSN)
  • Your account number
  • Your e-mail address
  • Verification of Income 

  Not a member of Kitsap Credit Union? No problem, we can set up your membership with your loan upon approval.

  You can also apply over the phone. Loan representatives are standing by 24 hours a day, seven days a week (including all holidays) to take your loan application by phone. Simply call toll free at 1(800) 422-5852.

  Ready to get started?

  Visit our online application center and apply today!

   

• Are there closing costs associated with a Home Equity Line?

  Yes; however, Home Equity Lines of Credit (HELOC) costs are typically covered by the credit union with the exception of the cost of the appraisal, if required.

   

  Interested in a HELOC? 

  You can access your established credit line any time to meet your needs and your payments are based only on the amount you owe.

  • 12 year term
  • You can draw funds for up to 10 years
  • You can access your HELOC by making a transfer online, via mobile banking, through a teller, or by phone

  Use our online services to view our current rates and apply now!

   

• How do I know if I have enough equity to qualify for a loan?

  Most lenders require you to have at least 15-20% equity in your home to qualify for a Home Equity Loan or HELOC. You can calculate this by subtracting your mortgage balance from your home's appraised value.

• How does a Home Equity Line of Credit (HELOC) work?

  A HELOC is a revolving line of credit that allows you to borrow money as needed, up to a certain limit, using your home's equity as collateral. You only pay interest on the amount you borrow.

• How is the interest rate determined for a Home Equity Loan or HELOC?

  The interest rate is typically based on factors like your credit score, loan amount, and current market conditions.

• How long does it take to get approved for a Home Equity Loan or HELOC?

  The approval process can take anywhere from a few days to several weeks, depending on the lender and required documentation.

• Is the interest on a Home Equity Loan or HELOC tax-deductible?

  In some cases, interest on a Home Equity Loan or HELOC may be tax-deductible if used for home improvements. Check with a tax professional for details.

• What credit score is required for a Home Equity Loan or HELOC?

  Most lenders prefer a credit score of at least 620-700 for a Home Equity Loan or HELOC, but requirements vary by lender.

• What happens if I miss a payment on my Home Equity Loan or HELOC?

  Missing a payment can result in late fees, a negative impact on your credit score, or even foreclosure if payments are repeatedly missed.

• What happens to my Home Equity Loan or HELOC if I sell my home?

  If you sell your home, you will need to pay off your Home Equity Loan or HELOC in full before the sale is finalized.

• What is home equity, and how is it calculated?

  Home equity is the difference between your home's current market value and the amount you owe on your mortgage. It increases as you pay down your mortgage or if your home's value rises.

• What is the difference between a fixed-rate Home Equity Loan and a HELOC?

  A fixed-rate Home Equity Loan provides a lump sum with a set interest rate and repayment term, while a HELOC allows you to withdraw funds as needed with a variable interest rate.