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Home Equity/Mortgage Loans

Your home equity is the difference between what you owe on your mortgage (and on any other home loans) and the market value of your home. You build equity as that difference grows - when you repay mortgage principal to decrease the amount you owe, or when your home's value increases.

You can borrow against that equity when you need cash, using either a home equity loan or a line of credit. Both offer a number of advantages over other types of financing, including:

  • Interest Savings. Home equity loans and lines typically have much lower interest rates than other types of financing, such as credit cards and personal loans.
  • Tax Benefits. As of tax year 2018 restrictions now apply. Proceeds used to perform home improvements are typically tax deductible. Consult your tax advisor about the deductibility of interest.

Using Your Home's Equity: A Responsible Approach

Comparing Home Equity Loans and Credit Lines
  Home Equity Loan Home Equity Line of Credit
What You Get A single lump-sum payment
for the full loan amount.
A revolving source of cash that you can
draw from as needed.
How You Use It To finance large one-time expenses
that have a definite cost.
To finance ongoing expenses or misc.
purchases, like a credit card.
How You Repay Repay the full loan amount over
a specific time period, at a fixed
interest rate.
Make payments on the outstanding
balance, at a variable interest rate.
Benefits It offers simple repayment terms,
and the security of knowing your
payments will never increase.
It's there when you need it, and you
only make payments on what you use.

The home must be your primary residence in MD, PA, DC, VA, DE or NJ and be zoned for residential use. Mobile homes are not eligible.

Have a High Rate Home Equity Loan Elsewhere?


A variable-rate credit line secured by your principal residence in Maryland, Virginia, Pennsylvania, Delaware, New Jersey or the District of Columbia, your Home Equity Line Of Credit has an interest rate that is based on the Prime Rate as published in the Wall Street Journal. A discounted 3.99% APR* introductory rate is available for the first 12 months of the loan. Ongoing rates are as low as prime - 1/2%, subject to a floor rate of 3.0% APR. The loan rate is thereafter reviewed and adjusted quarterly.

The maximum line may be up to 85% of the value of your home less your existing mortgage that will not be paid off with the loan proceeds. Third mortgages are not permitted unless the second mortgage is held by LM Federal. Once your loan is settled at the Credit Union, or at a location convenient to you. Our mobile settlement officers can meet you anywhere including at your home. Funds may be accessed conveniently with check-writing at no cost.

There are no application fees, credit report fees or annual fees. Closing costs are waived for loans with a credit limit of $25,000 or greater. Note: closing costs paid by the Credit Union will be added to the loan payoff if the loan is closed within three years of origination (paying the loan to zero does not mean the loan is closed).

LMFCU Home Equity Line of Credit Disclosure (PDF)

What You Should Know About Home Equity Lines of Credit

The minimum monthly payment due is based on the balance when a loan advance was last given. The minimum payment is calculated by amortizing your new loan balance of a 20-year term at the current interest rate in effect. You may repay your loan by convenient payroll deduction, by automatic transfer from a Credit Union account or the mail. To calculate a payment, consult our online loan payment calculator.

Send an email to a Loan Specialist at loans@lmfcu.org

* APR = Annual Percentage Rate

Have a High Rate Home Equity Loan Elsewhere?


This borrowing option is a fixed-rate installment loan secured by your primary residence in Maryland, Virginia, Delaware, Pennsylvania, New Jersey or the District of Columbia. Members with good credit will qualify for our lowest rates and be able to borrow up to 85% of the value of their home. Repayment terms of up to 15 years are available. There are no points, balloon payments, credit report, lender or application fees.

Closing costs are typically paid by the Credit Union if the loan amount is $25,000 or greater. For loans of less than $25,000, closing costs for the loan may be paid at settlement by the member or taken from the loan proceeds. NOTE: Most closing costs paid by the Credit Union will be added to the loan payoff if the loan is paid off within three years of origination.

The maximum loan available is $250,000 (based on your credit score). The maximum repayment term is 15 years.

Closing costs include fees for a title search, attorney fees, county and/or state taxes and fees, recording and release fees, lien and/or judgment reports, etc. Ask for a closing cost estimate prior to submitting an application. Closing costs, which range from $625 to $2,800, will vary based on fees and taxes charged by your local and/or state government.

Questions? Call or send an email to a Loan Specialist at loans@lmfcu.org or 800-410-0501.