Air Academy Credit Union offers two primary ways to access the equity in your home: a Home Equity Line of Credit (HELOC) and a Fixed Rate Second Mortgage.

What is a Home Equity Line of Credit (HELOC)?

According to the Consumer Financial Protection Bureau, a Home Equity Line of Credit is a line of credit, like a credit card, except you are borrowing against the equity of your home. With a HELOC, you can borrow or draw money multiple times from an available maximum amount. Similar to a credit card, when you make payments on your HELOC the amount of available credit is replenished.

 At Air Academy Credit Union, a HELOC gives you quick access to the money you need now. Our HELOC features a 10 year advance period and a 10 year repayment period. It requires interest only payments through the advance period. Additionally, there is no annual fee, and we offer quick approvals.

 Whether it is a planned purchase, unexpected expense, or way to consolidate debt, a HELOC gives you quick access to the money you need now.

What is a Fixed Rate Second Mortgage?

A fixed rate second mortgage is an additional loan taken against a property on which you already have a mortgage loan. This gives you access to a lump sum loan with a fixed term and rate.

 A fixed rate second mortgage may be a good option if you are preparing for a large one time expense, such as a wedding or buying a second home.

 

Key Differences Between a HELOC and a Second Mortgage

Home Equity Line Of Credit

  • Funding Structure: Draw money multiple times from an available maximum amount
  • Interest Rate: Rates may vary after account is opened
  • Payment Structure: Interest only payments through the advance period
  • Best Used For:Planned purchase, unexpected expense, or way to consolidate debt

Fixed Rate Second Mortgage

  • Funding Structure: Lump sum loan
  • Interest Rate: Fixed term and rate
  • Payment Structure: Fixed term and rate
  • Best Used For: Large one time expense, such as a wedding or buying a second home
 

When to Choose a HELOC

A HELOC is an option if you have a planned purchase, unexpected expense, or way to consolidate debt. During the 10 year advance period, the minimum monthly payment is the greater of $50.00 or the finance charges that have accrued during the billing cycle.

When to Choose a Fixed Rate Second Mortgage

A fixed rate second mortgage may be a good option if you are preparing for a large one time expense. This option allows you to access the equity in your home without having to refinance your first mortgage. Typically, these have lower interest rates than other types of loans.

Making the Right Choice

The interest paid on a second mortgage could be tax deductible. For details, consult your tax advisor.

 A conversation is a great place to start. Schedule an appointment with a Mortgage Loan Officer and they will find the best loan options for you. You can explore our Home Equity Loans and check our current Mortgage Rates online.

Frequently Asked Questions

  • What is the minimum loan amount for a HELOC?
    • At Air Academy Credit Union, the minimum loan amount is $10,000. 
  • Are there closing costs associated with a HELOC?
    • Yes, the closing cost range is $400 to $2,000. 
  • Do I have to refinance my first mortgage to get a Fixed Rate Second Mortgage?
    • No, you can access the equity in your home without having to refinance your first mortgage