Home Equity Loans

FAQ About Home Equity Loans, Oklahoma

• 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 home equity loan 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 loan and a home equity line of credit (HELOC)?

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

  • They are both considered a second mortgage on your home.
  • You make separate payments on your mortgage and your home equity loan or HELOC.
  • Home equity loans and HELOCs tend to have higher rates than your first mortgage 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 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.

  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 draw 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 greater).
  • If you only make minimum payments during your draw period, you need to make a balloon payment at the five-year mark.

   

• When is a home equity loan a good option?

  Whether a home equity loan is a good idea or not depends on your financial situation and what you plan to do with the money.

  Interest rates for home equity loans and lines of credit 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 loan 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.
  • Your interest payments may be tax-deductible.* 

  *If you choose to use your home equity loan funds to improve your home, you may be able to deduct the interest from your taxable income. Eligibility depends on various factors and you should consult your financial adviser and/or attorney for advice.

• What will my interest rate be?

  The rate you get will be based on your credit score and financial situation as well as the loan term you choose. Shorter loan terms get lower rates.

  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: 9am - 5pm (CT) | 
  • Apply online.
  • Complete this form and a rep 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 loan is funded.

• What is the home equity loan process?

  Getting a home equity loan 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 loan on top of your mortgage
  • What home equity loan term suits your needs and budget

  Next, apply online and get pre-qualified for your home equity loan with a likely rate. If approved for pre-qualification, 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 home equity loan and disburse the funds into your preferred account.

• What documents are needed for a home equity loan?

  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