Unlocking Home Equity with RCU Home Equity Loans

Home equity is a valuable asset that many homeowners have but don’t fully utilize. With an RCU home equity loan from Royal Credit Union, you can unlock your home’s equity and put it to work improving your financial situation. In this comprehensive guide, we’ll explain what home equity is, how RCU home equity loans work, and how you can use home equity to achieve your financial goals.

What is Home Equity?

Home equity is the difference between what your home is worth and what you owe on your mortgage. For example, if your home is worth $300,000 and you owe $180,000 on your mortgage, you have $120,000 in home equity ($300,000 – $180,000 = $120,000).

As you pay down your mortgage principal and as your home appreciates in value over time your equity builds. Home equity is essentially your ownership stake in your home. It’s money that you’ve invested in your home that you can access when you need it.

How RCU Home Equity Loans Unlock Home Equity

RCU offers home equity loans in the form of home equity lines of credit (HELOCs). A HELOC allows you to borrow against the equity in your home. It works like a credit card, giving you access to a revolving line of credit up to a certain limit.

Here’s how it works:

• RCU will lend you up to 85% of your home’s value minus what you owe on your mortgage. So if your home is worth $300,000 and your mortgage balance is $180,000, we may lend up to 85% of $120,000 ($102,000).
• You can borrow up to your credit limit and repay the balance over time. As you repay, that credit becomes available to borrow again.
• RCU offers a 5-year draw period where you can borrow funds, followed by a 15-year repayment period.
• Interest rates are variable but generally very low compared to other financing options.
• RCU has no annual fees or prepayment penalties.

The flexibility, low rates and easy access to funds make a RCU HELOC a powerful financial tool for homeowners.

7 Smart Ways To Use RCU Home Equity

What are some smart ways to utilize the equity you have in your home with a RCU HELOC? Here are 7 great options:

1. Consolidate Higher Interest Debt

One of the most popular uses for HELOCs is consolidating higher interest rate debts into one manageable monthly payment at a lower interest rate. This can help you pay off credit cards, personal loans, and other debts faster and save substantially on interest costs.

2. Finance Major Home Improvements

HELOCs give you access to the funds you need for major home renovations, repairs, additions, and other improvements interest-free during the draw period. Then you can repay the costs over time at a low interest rate.

3. Pay For College Expenses

College costs continue to rise every year. An RCU HELOC gives parents a lower cost way to pay for tuition, room and board, books, and other college expenses for their children or themselves.

4. Make Down Payment on Investment Property

Real estate investors often use HELOCs to come up with the down payment on a rental property or other investment property purchase. This allows them to build their investment portfolios.

5. Start or Grow a Business

Entrepreneurs can use RCU HELOCs as an affordable way to get startup funding or growth capital for an existing business. Since you only pay interest on what you borrow, it’s an extremely flexible funding source.

6. Pay Off High Interest Auto, Boat, RV, and Powersports Loans

Is your monthly budget weighed down by high interest loans on cars, boats, RVs, motorcycles, snowmobiles, ATVs, or other vehicles? An RCU HELOC may allow you to pay those off, consolidate the debts, and reduce your interest costs.

7. Access Emergency Funds

Because a HELOC allows you to borrow up to your credit limit at any time, it can serve as an emergency funding source for unexpected costs. This can give you peace of mind knowing funds are available if you need them.

Benefits of RCU Home Equity Loans

Why should you choose Royal Credit Union for your home equity loan needs versus other lenders? Here are some key benefits RCU offers:

• Low interest rates – RCU offers very competitive HELOC interest rates.

• No annual fees – Unlike some lenders, RCU has no annual fees to maintain a HELOC.

• Local servicing – Your HELOC will be serviced locally by RCU’s Minnesota-based team.

• Flexible terms – Draw funds you need for 5 years, then have 15 years to repay.

• Easy access – Simply transfer funds to your RCU checking or savings account anytime.

• Hometown lender – RCU is a full-service credit union founded in Eau Claire, WI in 1950.

How Much Does RCU Lend?

The amount you can borrow with a RCU HELOC depends on several factors:

• The appraised value of your home
• The amount you owe on your existing mortgage(s)
• Your income, credit score, and overall financial profile

In most cases, you can borrow up to 85% of your home’s value minus your current mortgage balance. For example:

• Home value: $300,000
• Current mortgage: $180,000
• Potential HELOC: Up to 85% of $120,000 = $102,000

Of course, every situation is different and subject to approval based on RCU’s lending criteria. Our mortgage experts can provide a free, no-obligation consultation to estimate how much you may qualify for.

How To Apply for a RCU Home Equity Loan

Ready to learn more or apply for a home equity loan from Royal Credit Union? It’s easy to get started:

• Stop by any RCU branch – Meet with a mortgage expert at one of 20+ locations across Minnesota and Wisconsin.

• Call 800-341-9911 – Speak with a knowledgeable lending specialist over the phone.

• Apply online – Complete RCU’s easy online HELOC application anytime.

• Schedule an appointment – Set up a personal appointment at a time convenient for you.

RCU will walk you through the home equity loan process from application to closing. In many cases, we can approve your application in just 5-7 business days. Unlock your home’s equity today with an RCU home equity loan!