Home Equity and HELOC FAQs

Frequently asked questions regarding home equity loans and home equity lines of credit are answered here.


Yes, you must be financing a home or own a home in your name in order to do a Home Equity loan. Your home’s equity is the dollar amount that is available to borrow against after subtracting what you owe on your mortgage (and any other outstanding liens) from your home’s current market value.
The amount you can borrow from your home’s equity is largely determined by your available equity amount, property type, credit qualifications, and state requirements based on the home’s location. To determine your available equity for a primary residence, in Texas, take 80% of your home’s appraised or fair market value and subtract the balances of any outstanding mortgages and liens on the property. In South Carolina take 90% of the home’s appraised or fair market value. If you qualify, the minimum home equity line of credit amount offered by HFCU is $5,000 and in most cases the maximum amount offered by HFCU is $350,000.
HFCU charges no origination fees. Standard closing cost fees apply.
The average number of days from application to approval will vary, depending on your credit history, the equity in your home, and the financing program selected. HFCU may be able to approve your financing more quickly if you apply on the HFCU website.
By applying online, you may be conditionally approved instantly, subject to verification of your application information.
The average time for closing varies, though the minimum is 10 days from approval. There are some state mandated right of rescission and disclosure requirements that must occur before an equity loan can be funded. These mandated wait times vary by state.
Interest rates vary based on the market and the prime rate set by the federal government. The annual percentage rate (APR) on a loan is the cost to borrow money expressed as a yearly percentage. For home equity mortgage loans, excluding home equity lines of credit, it is a fixed rate, and it includes the interest rate plus any other charges or fees.
For home equity lines of credit (HELOCs), the APR is just the interest rate plus a preset margin (as defined in your home equity line of credit agreement). The rate is variable and subject to change, based off the prime rate set by the federal government.
Home Equity Loans can be structured for loan repayment terms that include 5 years, 10 years, 15 years, 20 years, and 30 years.
Home equity lines of credit (HELOCs) have a draw (borrow) period of 10 years and 1 month. During the draw period, you can access available equity without reapplying. Once the draw period has ended, your outstanding loan balance will convert to a repayment period of up to 20 years.
For a Home Equity loan, your monthly payments will include both principal and interest.
For home equity lines of credit, your minimum monthly payment will be $100.00 and may change depending how many times you draw from the credit limit and how often the federal government changes the Prime Rate. Your payments are recalculated monthly to repay your principal balance over the remaining months of your draw period and your repayment term.
A home equity line of credit has a variable interest rate that is calculated by adding a preset margin (as defined in your home equity line of credit agreement) to the Prime Rate as published in the Western Edition of the Wall Street Journal “Money Rates” table. Your rate and payments will increase or decrease as the Prime Rate changes.
A minimum advance of $4,000 applies in Texas on a HELOC and a minimum of $1800 applies in South Carolina on a HELOC. The loan must have at least $4000/$1800 in available credit in order to request a draw on the HELOC (Depending on the state where the home is located.)
Payments can be mailed to PO Box 19549 Sugar Land, TX 77496-9549
There is a payment coupon included in your closing package; you should start receiving a monthly statement after your first billing cycle, approximately 30 to 45 days after closing.
Yes, you can make payments from your HFCU share account (savings, checking, and money market) by:
Logging into your eTeller (online banking) account
Select Transfer
Choose the Transfer from account (HFCU Savings or HFCU Checking)
Choose Pay to account (you should see your Mortgage and any other loan and savings/checking you are not paying from)
Select Amount to Pay
Click Submit
You will have an option at your mortgage closing to enroll in a mortgage payment EFT/ACH payment option, aka: automatic draft, by filling out the automatic payment form included in your closing packet and attaching a voided check so HFCU can set up the automatic payment after the loan closes with no further steps from you, the borrower.
If you want to set up this process after your mortgage closes, please contact HFCU member service for the appropriate form by calling (281) 243-0500. Once received, please fill the form out, sign, and email directly to mortgageservicing@houstonfcu.org.
No, you cannot make a mortgage payment with a credit card, however, you can setup automatic mortgage payments, so that your monthly payment can be withdrawn automatically from your HFCU checking/savings account or a checking/savings account you hold at another financial institution. Instructions for both options are listed above.