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Home Equity Line of Credit

 

Use the equity you've built in your home to access funds for major expenses with a 10 year line of credit followed by a 20 year repayment period.

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In order to take advantage of this offer, you'll need to become a PenFed Member

To become a member, you need only fulfill two requirements:

1. Determine your eligibility

2. Open a Regular Share Account with at least $5

Owner Occupied Homes

Combined Loan to Value (CLTV)
Line Amount Rate1

70% or Less CLTV

$ - $

Variable % APR (Prime + .25%)

70.01% to 80% CLTV

$ - $

Variable % APR (Prime + .50%)

80.01% to 85% CLTV

$ - $

Variable % APR (Prime + 1.00%)

85.01% to 90% CLTV

$ - $

Variable % APR (Prime + 1.5%)

1 Prime Rate is % as of . There is a minimum rate floor of % APR and a maximum rate of % APR.

Non-Owner Occupied Homes

Combined Loan to Value (CLTV)2
Line Amount Rate3

80% or Less CLTV

$ - $

Variable % APR (Prime + 1.5%)

2 The Loan to Value(LTV) is capped at 75% in TX.

3 Prime Rate is % as of . There is a minimum rate floor of % APR and a maximum rate of % APR.

FEATURES & BENEFITS

  • Loans from $25,000 - $500,000
  • 10 year draw period and 20 year repayment period
  • Interest only payments during 10 year draw period
  • Switch from a variable to a fixed rate on all or some of your line of credit

• PenFed pays most closing costs

• $99 annual fee, waived if $99 in interest was paid during the preceding 12-month period.

• Available funds when you need them.

Disclosures Print Icon Print

Closing Cost Credit: PenFed will pay most closing costs associated with an interest only home equity line of credit (HELOC) which includes credit report, flood certification, settlement/closing, property ownership and encumbrances search, recording, property search, and quick close. Member is responsible for any city, county and/or state taxes if the subject property is located in FL, LA, MD, MN, NY, TN, or VA. If an appraisal is required, the member, who is responsible for the fee whether or not the loan closes, will pay the cost. The member is responsible for notary fees. Should this loan be paid off or closed within 36 months from the anniversary date of the loan closing, the member will be obligated to reimburse the full amount of the PenFed paid closing costs for the loan.

Interest may be tax deductible, consult a tax advisor for further information regarding the tax deductibility of interest and charges.

Home equity lines of credit (HELOC) are variable rate loans and the interest rate is subject to increase after consummation of the loan on monthly basis. Closing costs range between $500 and $8,500 for credit lines of $500,000. Contact a representative for additional details.

† Annual Fee: Notwithstanding the foregoing, an annual fee of $99 will be assessed on each account anniversary if $99 in interest was not paid during the preceding 12-month period
Appraisals: PenFed will attempt to establish value via an independent method. If that method is unsuccessful or the value is not sufficient for the amount requested, an appraisal will be required regardless of CLTV. An appraisal is always required in the following circumstances:
• For all loans with a loan amount greater than $250,000.

If an appraisal is required it must be ordered by PenFed. You will be contacted for authorization and payment prior to ordering. Appraisal fees average $150 to $525 (some run higher).

Fixed Rate Advance Lock-In You may lock in an Annual Percentage Rate for Advances during the Advance Period. During your Advance Period, you may choose to have three separate Fixed Rate Advances locked in at any one time, with a maximum of two new Fixed Rate Advances per calendar year. Each Fixed Rate Advance must equal or exceed Ten Thousand Dollars ($10,000.00) and you may not request a Fixed Rate Advance that would cause the amount you owe to exceed your Credit Limit. The only term option for your Fixed Rate Advance is 240 months (“Fixed Rate Advance Term”). However, the term of your Fixed Rate Advance cannot exceed your Repayment Period.

Fixed Rate Advances will be amortized over the Fixed Rate Advance Term with the payment consisting of principal and interest. Your Annual Percentage Rate for a Fixed Rate Advance will be calculated by adding your Prime Rate, your Margin and the Additional Fixed Rate Lock-In Margin. Your Annual Percentage Rate for a Fixed Rate Advance shall not exceed 18% and shall be equal to or greater than 3.75% for primary residences and second homes and 4.75% for investment properties.

Property Insurance: Property insurance is required.

PenFed Mortgage Aggregate: If the total combined PenFed indebtedness for real estate loans against the collateral property exceeds $750,000 then the maximum CLTV is 80%. This total indebtedness includes a PenFed 1st mortgage, the new requested loan amount and any outstanding PenFed equity loan products.

Multiple PenFed Loans: Multiple PenFed Equity loans and HELOCs are available as long as the member and collateral qualify (except Texas). For Equity loans and HELOCs the total indebtedness cannot exceed $500,000 for all PenFed Equity and HELOCs combined.

PenFed does not lend on:

• Mobile homes
• Co-ops or time-shares
• Properties that are currently listed on the market for sale
• Commercial property or property used for commercial purposes, even if a residence is part of the property
• Undeveloped property (land only)
• Properties with more than 4 units

Properties that are currently under major construction/renovations: Property must be fully livable, with no safety issues. (Examples: no missing rails from stairs/decks, no open walls with wires showing, missing kitchen appliances/counters, missing bath fixtures or unfinished pool).

Interest Only Home Equity Line of Credit:

• This Account has a Draw Period of 10 years, followed by a repayment period of 20 years.
• If only minimum payments are made during the draw period, the loan balance will not decrease.
• In Texas, the maximum CLTV available is 80% on owner occupied properties and 75% on non-owner occupied properties. Additional restrictions apply in Texas, so please ask a representative for details.
• In all other states, the maximum CLTV is 90% on owner occupied properties and 80% on non-owner occupied properties.
• Property type of Condo has a maximum CLTV of 80%; except for Texas non-owner, occupied properties are 75%.
• The maximum CLTV available is dependent on credit qualification.
• Rates vary depending on owner occupancy and CLTV.

Minimum Loan Amount Requirements in all States:

• For an owner occupied property the minimum loan amount is $25,000 and the maximum amount is $500,000 with a CLTV of 85% or less of the fair market value and a maximum of $250,000 with a CLTV of 85.01 to 90.00%.

• For a non-owner occupied property the minimum loan amount is $25,000 and the maximum amount is $500,000 with a CLTV up to 80% of the fair market value.

Other terms and conditions apply; call 800-970-7766 to speak with a representative for details. All rates and offers are as of September 20, 2019 and subject to change without notice. To receive advertised product you must become a member of PenFed.


We do business in accordance with the Federal Fair Housing Law and the Equal Credit Opportunity Act.

Top 5 Reasons to Take out a Home Equity Line of Credit

Posted April 2016
by PenFed Your Money

If you’re in need of cash to cover major expenses, you might consider maxing out your credit cards or taking out a high interest loan but these may not be your best options. If you’re a homeowner, you have another source of cash you can tap into: the equity on your home. Doing this gives you great interest rates—lower than you’ll typically find on a credit card or personal loan—and the interest paid is typically tax deductible, making it one of the least expensive ways to borrow.

Borrowing against your home equity with a Home Equity Line Of Credit (HELOC) rather than a regular equity loan will also give you a great deal of flexibility, which makes them ideal for a variety of financial uses. Instead of giving you a lump sum up-front, a HELOC lets you get cash on a line of credit secured by your home’s equity when you need it—great for ongoing or unpredictable expenses. In the end, you only pay off what you’ve used.

So just what should you use your HELOC for?

We have some suggestions:

Home improvement.

Though remodeling and repairs can be costly, borrowing against your equity can be an easy way to make projects happen—especially if your home’s value has gone up since you purchased it, giving you more equity to work with. If you’re planning on selling, and want to fix up your home before putting it on the market, borrowing against your equity has even more appeal. If your improvements add more value to the home than they cost, you may even make money when you sell. Using a line of credit is ideal here, because you can take out money as you need it to pay contractors and cover other expenses.

Debt consolidation.

If you’re struggling with credit card debt, borrowing against your equity can be extremely attractive because of the low interest rates—much lower than any you’ll find on a credit card—using a HELOC to pay off other debts will give you an easy single payment at low interest rates. This not only means saving cash, but also cutting stress as you’ll no longer need to keep track of multiple bills and due dates. Just be careful not to use your now zero-balance credit cards to rack up more debt, or you’ll eventually be right back where you started.

Education expenses.

College costs are a huge expense, but a home equity line of credit can be a good way to pay for it. Not only will you have a lower interest rate than you would with a student loan, but having a line of credit allows you the flexibility to take out as much cash as you need every semester to pay for tuition, textbooks, and other expenses.

Weddings, vacations, and other big ticket items.

While you never want to skimp on weddings, honeymoons, or that dream family vacation, these things can be tough to pay. Borrowing against your equity lets you get exactly what you need, right now, and lets you pay it back later at reasonable interest rates.

Covering emergencies.

Though you should certainly have an emergency fund to help cover unexpected expenses, there’s always the chance of running into an emergency that’s larger than your emergency fund. While you might put any excess on a credit card, the interest rates can be a burden—and you can be easy to run into your credit limit. A HELOC can help you get the cash you need—especially if they’re medical expenses or repair expenses spread out over time—without racking up big interest bills.

PenFed offers home equity lines of credit of up to $400,000 with low interest rates — and, best of all, PenFed will pay most of your closing costs¹ to keep your up-front expenses low.


Disclosures:

¹Closing Cost Credit: PenFed will pay most closing costs associated with an equity line of credit (ELOC) which includes: credit report, flood certification, settlement/closing, property ownership and encumbrances search, recording, city/county taxes, state taxes, property search and quick close. If an appraisal is required, the cost will be paid by the member, who is responsible for the fee whether or not the loan closes. The member is responsible for notary fees. Should this loan be paid off or closed within 24 months (36 months for 5/5 ELOC) from the anniversary date of the loan closing, the member will be obligated to pay PenFed the full amount of the total closing cost for the loan. Other terms and conditions apply; call 1-800-970-7766 extension 6400 for details.

See your tax advisor for details on tax deductibility of interest.

Home Equity Lines of Credit are variable rate loans and the interest rate may increase after consummation of the loan.

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