There are plenty of factors to consider for Texas homeowners looking to tap into their property’s value before committing to a mortgage. RBFCU home equity loan rates may be a good place to start. Randolph-Brooks Federal Credit Union members in the state can find fixed rate home equity loans and variable rate home equity lines of credit (HELOCs). Our guide explains current rates, factors that make up your offer, eligibility, and how to apply.
RBFCU Home Equity Loan Rates & Terms
The RBFCU home equity loan rates vary based on the length of the term you choose and your credit history. As a member-owned credit union, RBFCU can offer more favorable rates on its home equity loans than the national banks, which is one of the reasons Texas homeowners may compare it to other lenders before choosing one.
Fixed-Rate Home Equity Loans vs. HELOC Rates
You receive a lump sum upfront and the interest rate is fixed for the life of the loan, so your monthly payment is never affected. Fixed rate home equity loans are popular for homeowners who know exactly how much they need to borrow for a renovation, debt reduction, or a major purchase.
The difference with a HELOC is that you don’t get a lump sum, but a line of credit you can draw on as you need it, and the interest rate is adjustable, meaning it can fluctuate. HELOCs are best for homeowners who want flexibility and aren’t sure of how much they’ll need to borrow upfront.
RBFCU Home Equity Rates by Term Length
A shorter term usually results in lower rates, while the longer term may carry a slightly higher rate but require smaller monthly payments over a longer time period. RBFCU offers a number of term lengths for its fixed-rate home equity loans; but, members interested in the 30-year term should know that the 30-year term is typically reserved for first-lien loans. Because rates change depending on market conditions, it’s best to check RBFCU’s rate sheet or talk to a loan officer for the most recent rates before you apply.
Factors Influencing Your RBFCU Home Equity Rate
More than simply the term you select, other personal factors may influence your rate.
Credit Score, CLTV, and DTI Impact
Rates are determined by your credit score, combined loan-to-value ratio (CLTV), and debt-to-income ratio (DTI). Lenders offer a lower rate if you have better credit and lower CLTV. RBFCU limits its total borrowing on your homestead, including any HELOC balance, at 80% of the home’s fair market value. Knowing where you stand in the equity of your home is one good first step to take before you apply.
Fees, Closing Costs, and Rate Discounts
Smaller loans typically do not charge an application or appraisal fee. For larger loans, additional fees will be added that may not always be disclosed in the paperwork. Members are still expected to pay traditional closing costs like title and filing fees. The association does not charge any prepayment penalty, so members are free to pay the loan off early at no cost. Depending on how the funds are used, some or all of the interest may be tax-deductible, which should be checked with a tax professional.
RBFCU Home Equity Loan Eligibility & Requirements
Before the rate can be locked in, the borrower must meet the RBFCU membership and equity requirements.
Member Qualifications & Minimum Equity Needed
Home equity loans from RBFCU are only available to members of the credit union and must be used on a primary residence in Texas. You need to have equity in your home as the credit union will base your maximum loan amount on the appraised value of your home less any mortgage or lien outstanding.
Required Documentation to Lock In Rates
You should bring proof of income, current mortgage statements, and proof of homeowners insurance. Texas law also requires that you have a 12-day cooling-off period after signing disclosures in order to gather any remaining information your loan officer requests. This time-out period is mandated by Texas law for home equity loans on a Texas homestead.
How to Apply for an RBFCU Home Equity Loan
The application process begins online where you’ll submit basic financial and property information. A loan officer will contact you within a few business days to review your information and answer any questions you may have. In the meantime, expect to sign the disclosures and cooling-off period, and provide supporting documentation. Closing is usually 45 days from application to approval. It’s still worth comparing your personal rate to other lenders, even if RBFCU home equity loan rates look competitive on paper, as your credit history can affect the numbers.
For a look at how RBFCU’s mortgage and home loan products stack up, click here. RBFCU Home Loan Options.