Home Equity Line of Credit

HELOC FAQs

• What is home equity?

  Home equity is the difference between what your home is worth and what you owe your lender. To determine this value, we look at the property’s current market value minus the balance of your mortgage and any other loans that put a lien on the property.
  
  For example, if your home is valued at $300,000 and you have an existing mortgage of $200,000, you would have $100,000 in equity in your home. The equity of your home can fluctuate over time based on the payments made and the market value of your home.

• How can I use my HELOC funds?

  You can access your equity and use the funds in a variety of ways, including:

  • Home improvement projects
  • Home repairs, such as window replacement, energy-efficiency projects, or a new roof
  • Major purchases such as a boat, car, or second home
  • Vacations, weddings, and other significant family events
  • Debt consolidation (for example, pay off high-interest credit cards)
  • Tuition and other educational expenses
  • Medical expenses
  • Unexpected expenses or emergencies

• What are the similarities and differences between a home equity line of credit (HELOC) and a home equity loan?

  Both a Home Equity Line of Credit (HELOC) and a home equity loan use your home's equity as collateral.

  • They are both considered a second mortgage on your home.
  • The loan amounts are determined by how much equity you have.
  • You make separate payments on your mortgage and your home equity loan or HELOC.
  • HELOCs and home equity loans tend to have higher rates than your first mortgage loan.

  A Home Equity Line of Credit (HELOC):

  • Gives you a line of credit that you can draw from when you need it instead of a lump sum payment.
  • The credit limit corresponds to the amount of equity you have in your home.
  • You can withdraw HELOC funds at any time during the loan period.
  • You only pay interest on the portion of funds you use, so if you carry a zero balance, you won't pay any interest.
  • With a WEOKIE Fixed Rate HELOC you can opt for a fixed-rate loan with a low minimum payment of 1% of the balance (or $50, whichever is less).
  • If you only make minimum payments during your loan period, you will need to pay the balance in full at maturity or refinance the loan.

  A Home Equity Loan:

  • Offers a single disbursement of funds or a lump sum payment.
  • It's an installment loan so you make equal monthly payments of your principal and interest over a fixed repayment term (5, 7, or 10 years).
  • Interest is amortized over your loan term, so you pay more interest and less principal at the start of your loan term, then more principal and less interest towards the end of your loan term.

• When is a home equity line of credit a good option?

  A home equity line of credit can be a good way to secure an ongoing source of funds at a competitive interest rate. Before you apply, you want to carefully consider your financial picture and make plans for how you will use the money. Your home secures the loan so you don't want to use the funds for regular expenses. Rather, you should use the funds to improve your home or achieve your life goals.

  Interest rates for HELOCs and home equity loans are typically lower than for other forms of credit because your home is used as collateral. This means your lender is taking less risk than with an unsecured loan. A lower rate means a lower cost to you.

  Advantages of a home equity line of credit include:

  • You may get a lower interest rate than with a personal loan or credit card.
  • If your current mortgage rate is low, you don’t have to give that up (unlike a cash-out refinance where your rate may change).
  • You can use the money for virtually any purpose.

• What will my interest rate be?

  The rate you get will be based on your credit score and overall financial picture. Many lenders only offer HELOCs with variable rates, but WEOKIE offers you a fixed rate for simpler budgeting and so you don't need to stress about what's happening in the markets.

  CLICK HERE to view current rates and loan terms.

• How can I apply?

  Our dedicated mortgage professionals will help you through the entire application and approval process. Choose a contact method below.

  • Call us at 405-235-3030 or 1-800-678-5363. M-F: 8am - 5:30pm (CT)
  • Apply online.
  • Complete this form and a WEOKIE trusted advisor will reach out to you.

  You do not have to be a WEOKIE member to apply. However, the primary applicant will have to become a member before the HELOC is funded.

• What is the HELOC approval process?

  Getting a home equity line of credit will be easier than getting your original mortgage simply because you've been through the mortgage process before! You'll need many of the same documents this time, too.

  First, consider these points:

  • How much home equity you have, as this will impact how much you can borrow
  • How much income you have, as this will impact your ability to repay the credit on top of your mortgage

  Next, apply online and get pre-approved for your HELOC with a likely rate. If pre-approved we move to the next steps:

  • We'll process your application, verify all your documents, and request proof of income.
  • We need to order an appraisal of your home and a title search to check for any liens, plus check your flood certification if needed.
  • When all this is done, we complete the underwriting process to finalize your loan approval.
  • We close on your HELOC and you can access the funds using online transfers or special checks.

• What documents are needed for a HELOC in Oklahoma?

  The documents you need may vary depending on your situation, but here's our handy checklist so you can prepare:

  • Your current residence address, or addresses, for the past two years
  • Social security numbers for all borrowers
  • Your employment history for the past two years – you'll need your employer(s) name, address, and phone number
  • Income information for all borrowers – you'll be asked to include salary, overtime, bonuses, commissions, interest/dividend, retirement income, and any other regular source of income
  • The year you purchased the property that will be collateral for your home equity loan, its original cost, current loan balance, and payment amount
  • Bank and brokerage account information, including the institution name and current balances
  • If you own any real estate (other than the property you're borrowing against), we'll have some basic questions including: address, current market value, the amount you owe, the amount of rental income you receive (if any), and what your monthly payment is
  • Information about your current debts – we'll ask for the name of the creditor, the account number, the current balance owing and the amount of your monthly payment

• What fees do I need to pay for a HELOC?

  A WEOKIE HELOC is affordable because:

  • There's no monthly or annual fee