Home Equity Line of Credit and Second Mortgage FAQ

Q: What is the interest rate on the Home Equity Line of Credit (HELOC)?
Q: What is the difference between a HELOC and a Second Mortgage?
Q: Is the interest rate on a HELOC Fixed?
Q: What are the costs of obtaining a HELOC or Second Mortgage?
Q: How long does it take to close on a HELOC or Second Mortgage?
Q: Is there a prepayment penalty should we want to pay it off early?

Q: What is the interest rate on the Home Equity Line of Credit (HELOC)?
A: The current interest rate is posted on our website Interest Rates page.

Q: What is the difference between a HELOC and a Second Mortgage?
A: The HELOC is an open-ended mortgage. The Second Mortgage is a closed end mortgage. On the HELOC you only pay interest on the dollar amount you take as an advance. You can continue to use the available dollar amount on the line for 10 years. In other words, the HELOC can be repaid and then you can borrow the money again and again. With the Second Mortgage you take the full amount of the loan at closing and interest starts accruing on a daily basis, and repaid on a fixed monthly basis.

Q: Is the interest rate on a HELOC Fixed?
A: No.  The interest rate is a variable rate subject to change on a monthly basis. When the interest rate changes, it changes on the entire outstanding balance of the loan.

Q: What are the costs of obtaining a HELOC or Second Mortgage?
A: Presently, there are no application or closing costs.

Q: How long does it take to close on a HELOC or Second Mortgage?
A: It should take no longer than two (2) weeks from application to closing.

Q: Does CCU have prepayment penalties?
A: No.  There are no prepayment penalties on any type of mortgage or HELOC at CCU.