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Mortgages and HELOCs

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Over the last year, the Federal Reserve has raised interest rates on more than one occasion, and they are expected to do so three to four times in 2018. Regardless of whether you have an existing real estate loan, or are looking to buy your first home, this raises important issues for you to consider.

If your Adjustable Rate Mortgage (ARM) is nearing the end of its “initial fixed rate period”, it may be time to refinance.

Adjustable Rate Mortgages (ARMs) start with a fixed rate for an initial period, usually between three to ten years. The rate then changes to a variable rate adjusting at set intervals. You may want to consider refinancing your current mortgage into a new ARM – or a Fixed Rate Loan to lock in one rate for the entire life of the loan.

If you have a Home Equity Line of Credit (HELOC), the interest on it may no longer be tax deductible – should you refinance your HELOC into a NEW FIRST MORTGAGE?

Changes to tax laws may impact whether you can deduct the interest on your HELOC. Additionally, as these are variable rate loans, you may want to refinance your HELOC to a fixed rate First Mortgage to control interest costs over the life of the loan. Refinancing to a fixed rate First Mortgage may also potentially reduce the amount of your taxes. Please consult a professional tax advisor on how the tax law changes would impact you specifically.

What’s the difference between an ARM and a Fixed Rate Loan?

An Adjustable Rate Mortgage (ARM) starts out with an interest rate lower than a Fixed Rate Loan. However, after an initial fixed rate period, the rate becomes variable – it will change based on the prevailing interest rates at the time it adjusts. With a Fixed Rate Loan, you have a consistent interest rate and monthly payment for the entire life of the loan. An ARM may be beneficial if you plan to sell the home in the near future, if you anticipate rates dropping, or if you anticipate an increased income that would allow you to absorb an increase in monthly payments.

If you have any questions about HELOCs or First Mortgages, we are here to help.

Our experienced loan professionals are here to listen to your needs and help you choose the right loan for your budget and needs. We can help you with questions related to:

  • Fixed Rate versus Adjustable Rate Mortgages
  • Understanding the mortgage process
  • First time home buying

Contact Us

Call Our Real Estate Department
1.888.499.FIRE ext. 778
Monday – Friday: 8:30AM – 6:00PM
Saturday: 8:30AM – 3:00PM

or Make an Appointment here


*APR is Annual Percentage Rate. The variable rate APR on home equity lines of credit may vary quarterly based on the latest U.S. Prime Rate as published in The Wall Street Journal as of the first business day of the month prior to change plus an as-low-as margin of 0% APR or 5.00% (The Prime Rate as of June 21st, 2018) APR whichever is greater for those account holders whose total mortgage loans, including your SF Fire Credit Union Home Equity Line of Credit do not exceed 80% of the value of your 1-4 family owner-occupied primary residential property in CA. The variable rate APR for account holders whose total mortgage loans, including your SF Fire Credit Union Home Equity Line of Credit that are greater than 80% but do not exceed 90% of the value of your 1-4 family owner-occupied primary residential property in CA will be an as-low-as margin of 1% APR or 6.00% APR whichever is greater.

The Minimum Home Equity Credit Line is $20,000. A $250 Application fee will be assessed at the time of closing. An appraisal fee will be assessed on credit requests of $250,000 or more. There is no annual fee. Borrower agrees to reimburse the credit union with a $300 early termination fee if account is closed within 2 years. Borrower must pay mortgage satisfaction fees at loan termination. Property insurance is required and flood insurance may be required. Rates and terms are subject to change. This offer is subject to credit approval.

SF Fire Credit Union reserves the right to approve or decline member credit applications based on the following conditions:
Member must be the owner of primary residential real estate property located in CA in which you live, member and co-applicant must have a verifiable income and must meet our standard credit terms and policies.

Offer applies to owner-occupied 1-4 family primary residences. Purchase money mortgage loans and loans secured by mobile homes do not qualify for this offer. SF Fire Credit Union must be in a first lien position, or in a second position behind no more than one other lender in connection with its home equity line or loan on the borrower’s primary residential real estate property. The combined loan to value ratio for all loans on such property may not exceed 90%.

Member must be at least 18 years of age. This invitation to apply offer is for a home equity line of credit with a limit up to $250,000. Higher line amounts are available to those members who meet our established credit standards. The maximum amount we can lend you depends on the value of your home, your income, amount of debt, and credit history.

**Please consult a tax advisor about your specific tax situation.