Compare Home Equity Loan and Lines of Credit
Home Equity Lines of Credit Pay an introductory rate of 3.99% APR!
Fixed Rate Home Equity Loans Rates are as low as 5.24% APR
Other Equity Information Improvement to Member Service!
Comparing Home Equity Loans and Lines of Credit
Your home equity is the difference between what you owe on your mortgage (and on any other home loans) and the market value of your home. You build equity as that difference grows - when you repay mortgage principal to decrease the amount you owe, or when your home's value increases.
You can borrow against that equity when you need cash, using either a home equity loan or a line of credit. Both offer a number of advantages over other types of financing, including:
- Interest Savings. Home equity loans and lines typically have much lower interest rates than other types of financing, such as credit cards and personal loans.
- Tax Benefits. Just like your first mortgage, the interest you pay on a home equity loan or line is usually tax-deductible. Consult your tax advisor about the deductibility of interest.
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Comparing Home Equity Loans and Credit Lines | ||
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Home Equity Loan |
Home Equity Line of Credit | |
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What You Get |
A single lump-sum payment for the full |
A revolving source of cash that you can |
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How You Use It |
To finance large one-time expenses that |
To finance onging expenses or misc. |
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How You Repay |
Repay the full loan amount over a specific |
Make payments on the outstanding |
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Benefits |
It offers simple repayment terms, and the |
It's there when you need it, and you |
A variable-rate credit line secured by your principal residence in Maryland, Virginia, Pennsylvania or the District of Columbia, your Home Equity Line Of Credit has an interest rate that is based on the Prime Rate as published in the Wall Street Journal. An introductory rate of 3.99% is available for the first six months. The maximum line currently available is $100,000.00 and may be up to 95% of the value of your home less your existing mortgage that will not be paid off with the loan proceeds. The minimum credit line available is $5,000. 3rd mortgages are not permitted unless the 2nd mortgage is held by LM Federal. Once your loan is settled at the Credit Union or at one of several locations convenient to you, funds may be accessed conveniently with check-writing at no cost. Closing costs are waived for loans with a credit limit of $20,000 or greater. Note: closing costs paid by the credit union will be added to the loan payoff if the loan is closed within three years of origination (paying the loan to zero does not mean the loan is closed).
The minimum monthly payment due is based on the balance when a loan advance was last given. The minimum payment is calculated by amortizing your new loan balance of a 20-year term at the current interest rate in effect. You may repay your loan by convenient payroll deduction, by automatic transfer from a Credit Union account or the mail. To calculate a payment, consult our online loan payment calculator. Loan Balance Minimum Monthly Payment $10,000 $69 $25,000 $172 $50,000 $344 $75,000 $516
Home Equity Line Payment Examples (Assuming an 5.50% annual percentage rate)
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Apply For A Home Equity Loan!
This borrowing option is a fixed-rate installment loan secured by your primary residence in the United States. Members with good credit will qualify for our lowest rates and be able to borrow up to 100% of the value of their home. Repayment terms of up to 15 years are available to members with good credit. Loans with no closing costs are available (with a rate that is 1% higher than those listed on the rates page, minimum loan of $25,000 required, restrictions apply). The credit union will pay for the home appraisal*, a $200 to $300 value. There are no points, balloon payments or application fees. The maximum loan available is $100,000.
Closing costs for the loan may be paid at settlement by the member or taken from the loan proceeds, unless the no closing costs option has been elected. Closing costs include fees for a title search, attorney fees, county and/or state taxes and fees, recording and release fees, lien and/or judgment reports, etc. Ask for a closing cost estimate prior to submitting an application. Closing costs, which range from $280 to $1,300, will vary based on fees and taxes charged by your local and/or state government.
Note: Closing costs paid by the Credit Union must be repaid if the loan is paid off within three years of opening. *The home appraisal fee will be added to the loan payoff if the account is closed within one year.
Click here for current rates
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You may apply for a home equity loan online, by phone during regular
business hours (800-410-0501, option 2), by fax or in person. Applications that meet our lending requirements are approved within 24 hours of receipt. Your home appraisal is then ordered (if an appraisal is required); results are received in less than a week. Your settlement date is then scheduled, typically within one week. For Maryland residents, aettlements are held at the Credit Union office or by meeting our mobile settlement officer at a location convenient to you. For DC, VA and PA residents, the settlement is held at the office of a title company in your area.
The home must be your primary residence and zoned for residential use; mobile homes and condominiums are not eligible (Fixed-Rate Home Equity Loans are available for second homes and rental properties; ask for that information if needed). Adequate property insurance and flood insurance (if your home is located in a flood plain) must be maintained on the home during the life of the loan. LM Federal is an equal housing lender.
Loan to Value: Maximum loan may be as much as 100% of the appraised value of your home (for fixed rate equity loans) and as much as 95% of the appraised value (for home equity lines) less any existing mortgage that won't be paid off with the new loan proceeds ($100,000 maximum), depending on your credit history. Additional rate discounts apply for lower Loan to Values (LTV's). For example:
Appraised Value $210,000
X up to 100% 80%
= $176,000
Less 1st Mortgage -$120,000
Maximum Loan $ 48,000
At LM Federal, we understand that applying for a mortgage can be an intimidating task. That’s why we’ve teamed up with PHH Mortgage Services to bring you a new, technologically advanced method of obtaining a mortgage. As one of the largest and most successful mortgage originators in the nation, PHH Mortgage Services promises easy, convenient and competitive loans. Together, we can provide your loan decision over the telephone or online, while you wait in the convenience of your home or office. In most cases, we can have all the answers you need within 20 minutes. For additional information, please click here.
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