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Home Equity 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. Just like your first mortgage, for tax year 2017 the interest you pay on a home equity loan or line is usually tax-deductible. For tax year 2018 restrictions now apply. Consult your tax advisor about the deductibility of interest.
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.


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 introductory rate is usually available for the first months of the loan. The loan rate is reviewed and adjusted quarterly.

The maximum line may be up to 90% 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 one of several locations convenient to you, funds may be accessed conveniently with check-writing at no cost.

There are no application or credit report fees. Closing costs are waived for loans with a credit limit of $20,000 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).

Home Equity Line of Credit Disclosure (PDF)

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

This borrowing option is a fixed-rate installment loan secured by your primary residence in the 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 90% of the value of their home. Repayment terms of up to 15 years are available. There are no points, balloon payments, credit report or application fees.

Most closing costs are waived if the loan amount is $20,000 or greater. 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.

For loans of less than $20,000, closing costs for the loan may be paid at settlement by the member or taken from the loan proceeds. 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 $280 to $1,500, will vary based on fees and taxes charged by your local and/or state government.

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