HELOC
A HELOC is a revolving line of credit that allows you to borrow money against your home as the collateral. Unlike refinancing your mortgage, a HELOC offers you the flexibility of a revolving line of credit.
Pros:
- No matter what your maximum draw amount, you take only what you need (when you need it), and only pay interest on what you draw.
- HELOCs often have low upfront costs compared to other types of loans and usually no formal closing.
- You usually get lower interest rates on HELOCs than credit cards or other unsecured loans.
Cons:
- Since they are classified as Adjustable Rate Mortgages, when interest rates go up, the rates on HELOCs do too, and they go up a lot faster than they do on other loan types.
- Depending on the terms, you may have a more limited amount of time to use the funds of a HELOC.
- Since you’re using your home as collateral, the lender can foreclose on your property if you can’t make your payments.
Home Equity Loan
A Home Equity Loan is often referred to as a second mortgage and operates in much the same way that your primary mortgage does. You borrow a set amount of money, which the lender gives you in full, and then you pay it back (with interest) in equal monthly payments over a fixed period of time.
The amount you can borrow is determined by the current equity in your house and your credit history. Home equity loans are especially useful for debt consolidation and large expenses like remodeling your house.
Pros:
- Home equity loans often offer lower interest rates than credit cards or other unsecured loans.
- Home equity loans are usually fixed rate loans, so you know exactly what you owe at the outset, and it will not change, making it easier to factor the costs into your financial plan.
Cons:
- Home equity loans often require the borrower to pay additional fees - such as closing costs, title work, a home appraisal and other fees.
- Since you’re using your home as collateral, the lender can foreclose on your property if you can’t make your payments.
Flexibility + Predictability? Introducing flexLOC
Imagine combining the best of both worlds – the flexibility of a Home Equity Line of Credit (HELOC) and the predictability of a fixed-rate Home Equity Loan. That's our flexLOC in a nutshell.
flexLOC
The flexLOC combines the flexibility of a Home Equity Line of Credit with the predictability of a fixed-rate Home Equity Loan.
You have the power to secure all or a portion of your current balance with a fixed interest rate and a set monthly payment in up to 3 different loans we call segments.
'Segments' allow you to take control of your financial stability. By locking in specific portions of your line of credit, you're ensuring that they won't be subject to interest rate fluctuations. This means your monthly payments remain steady and predictable, making it easier to manage your finances and plan for the future with confidence.
You have the power to secure all or a portion of your current balance with a fixed interest rate and a set monthly payment in up to 3 different loans we call segments.
'Segments' allow you to take control of your financial stability. By locking in specific portions of your line of credit, you're ensuring that they won't be subject to interest rate fluctuations. This means your monthly payments remain steady and predictable, making it easier to manage your finances and plan for the future with confidence.
With flexLOC, you can enjoy:
Tailored Flexibility: Access funds as you need them, just like a traditional HELOC.
Smart Segments: We get it – life is full of surprises. That's why we are introducing flexLOC "segments." You can lock in up to three different portions of your credit line (segments) with a fixed interest rate and a steady monthly payment.
Predictable Payments: Say goodbye to interest rate fluctuations on your chosen segments. Locking in rates means steady, predictable payments, making it easier to manage your finances and plan with confidence.
Financial Stability: Protect a portion of your credit line from the twists and turns of interest rate changes.
MAX Credit Union is a full-service financial institution serving Central and East Alabama, including Montgomery, AL; Auburn, AL; Opelika, AL; Prattville, AL; Wetumpka, AL; Tallassee, AL; and Troy, AL.