This is the turning point. This is the moment you go from dreaming to doing. With a Hybrid Home Equity Line of Credit, you can afford to do all the things your family deserves.
|Home Equity Hybrid Line of Credit - 1st Position
|10-year draw period and 15-year payment term
|Fixed rate between 7.12% – 9.12% then variable rate between Prime + 0.00% and Prime + 1.25%
|Home Equity Hybrid Line of Credit - 2nd Position
|10-year draw period and 15-year payment term
|Fixed rate between 7.24% – 9.24% then variable rate between Prime + 0.25% and Prime + 1.50%
– Ana A.
A hybrid home equity loan, or fixed-rate HELOC, is a combination of the two products.
A traditional home equity loan usually comes with a fixed annual percentage rate (APR) for the entire loan term.
A traditional HELOC usually comes with a variable rate for the entire draw period and repayment term.
A hybrid fixed-rate home equity loan or HELOC means you get a fixed rate for the first few years of your draw period and then you get a variable interest rate for the remainder.
Power Financial Credit Union lets you choose if you want to lock in a fixed rate for 3, 4, or 5 years. In this period, your rate will stay the same no matter what happens in the markets. This fixed-rate period offers a great opportunity to cross off your to-do list or pay down high-interest debt!
When you apply for your HELOC, you get a fixed rate based on your credit score and other factors like your debt-to-income (DTI) ratio or loan-to-value (LTV) ratio.
At the end of the fixed-rate period, your interest rate will begin going up and down with the markets. The variable rates you get will be based on a Prime Rate (such as the Federal Funds Rate) plus a margin determined by your lender.
The Prime Rate is how much financial institutions pay to borrow money from each other overnight so that they always have the legal amount of reserves in their accounts. Your lender then adds a small margin on top of that, which may be determined by your credit score and other factors.
The amount you can borrow is based on the amount of equity in your home. You can borrow up to 70% of that equity. To work out your home equity:
Find out the current market value of your home. For example: $350,000
Subtract your current mortgage balance. For example: $200,000
You have equity of $150,000
70% of $150,000 = $105,000
As you pay down your HELOC balance each month, you can use the funds over and over again throughout your 10-year draw period.
You can use your hybrid HELOC for just about anything! Common uses include:
Home improvements, remodeling, and repairs
Vacations, weddings, and other family events
Medical, dental, and vision expenses
Unexpected expenses and emergency funds
Debt consolidation of high-interest credit cards and loans
Note that the interest you pay on your HELOC may be tax-deductible when the funds are used for substantial home improvements. That's why it's a good idea to draw on separate amounts of funds for each purpose – and keep records. Check with your tax advisor for details!
A HELOC is more like a credit card in that you get a credit limit, and you can use as much or as little of the funds as you want at any time. You can choose how much to repay each month. When you pay your balance down, you can use the funds repeatedly until the end of your 10-year draw period.
At the end of your HELOC draw period, you get a 15-year repayment period to pay off your outstanding balance.
In contrast, a home equity loan is a fixed-rate loan like a personal loan. You get a lump sum payment and then make equal monthly payments through your loan term until the loan is paid off in full.
Both options can offer more competitive rates than unsecured loans and credit cards because your home serves as collateral in case you don't repay the money.
Both options offer loan amounts of up to 80% of your home equity.
Any of our existing credit union members are welcome to apply for a fhybrid home equity line of credit, or it takes just a few minutes to become a member.
Our membership consists of those who: live, work or go to school in Broward, Charlotte, Collier, Lee, Martin, Miami-Dade, Monroe, Palm Beach County, Hillsborough, Manatee, Pinellas, Sarasota, or St. Lucie counties.
Immediate family of all current members are also eligible to join.
We're also proud to offer membership to our Select Employee Groups. Members or employees of these organizations are welcome to join and apply for our quality products and services no matter where you are located:
Traditional Home Equity Line of Credit (HELOC)
The Ultimate Guide to Home Equity Lines of Credit (HELOC)