Home Equity Line of Credit HELOC


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What is a HELOC?

A Home Equity Line of Credit* is a line of credit secured by the equity you have in your home. Once the line of credit is established, you can borrow as much as you need within the limit at any time during the term.* It’s a great option to have available for ongoing or unexpected expenses, and applying is easy.

  • Low, variable interest rates
  • Multiple payment options
  • No pre-payment penalty
  • No closing costs*

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Forbes 2020 Best-In-State Credit Unions

  • Why Choose a HELOC?

    A Home Equity Line Of Credit*, or HELOC, is not just for remodeling your home.  It is a line of credit based on the equity in your home that can be used for any purpose.  If you don’t already have one, here are 5 compelling reasons why you should consider a HELOC:

    1. Financial Security, Prepare for the Unimaginable
    Without a HELOC in place, the only way to access the equity in your home might be to sell it.  This can take time you might not have.  If you have a HELOC in place before a life altering event takes place, you can access the equity in your home when you need it most.

    2. Prepare for the Unexpected
    New air conditioner, new roof, or major damage to your home or vehicle that’s not covered by insurance.  Maybe you fail to plan for some upcoming expenses like tuition or taxes.  With a HELOC in place, you are prepared to pay these expenses anytime, without the need to search for funding at the last minute.  

    3. Tax Advantages
    In some cases, there are tax advantages associated with a home equity line of credit.  Imagine paying for updates to your home and being able to deduct the interest as you do on a home loan.  Deductibility limits may apply, so you should consult your tax professional to see what specific tax advantages apply to your situation.

    4. Consolidation
    Interest rates on HELOCs are slightly higher than a first mortgage but much lower than on credit cards and other types of consumer loans.  Consolidating high interest debt is one of the most popular uses for a HELOC.

    5. Remodel
    If you have a project that is going to take six months to complete, you’re likely to need only 25% to 35% of the total loan amount upfront.  The rest will be paid in stages as the project progresses.  If you choose a signature loan, second mortgage, or cash out refinance, you begin paying interest on the entire amount borrowed immediately.  With a HELOC, you only pay interest on the money you are using. Your interest savings can be significant.  You can also benefit from a HELOC when the exact cost of a project is unknown in advance.

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  • Frequently Asked Questions

    How do I apply for a HELOC?

    An applicant can apply online, by phone or in a La Cap branch.

    Are there restrictions on which properties are eligible?

    • The property has to be located in the state of Louisiana.
    • The property has to be owned by the applicant (In whole or in part).
    • The property has to be the applicant’s primary residence.
    • The property has to be insured with homeowner’s coverage and flood insurance coverage (If it is in a designated flood zone according the FEMA flood maps).
    • All vested owners of the property will need to sign at the loan closing.

    Can a HELOC be on rental property I own?

    The member must reside in the property. It can be Single Family, 1-4 detached Single Family residence, Attached Single Family, Condo, Townhouse, or Co-Op.

    Can I do a HELOC on my home in Texas?

    We only do HELOC’s in Louisiana.

    What are the limitations on HELOC amounts?

    The minimum loan amount on the HELOC is $10,000 AND maximum loan amount on the HELOC is $250,000

    Is an appraisal required?

    An appraisal will be required if no AVM (Automated Valuation Model) is available or there are extenuating circumstances related to the property (i.e. necessary repairs, etc.). If an appraisal is needed, you will have to pay a $595 appraisal fee up front. Outside appraisals are not accepted.

    Is debt protection available for HELOCs?

    The HELOC can be protected in case of a medical emergency.    Debt protection is available for this product and there are several different options to choose from.

    What is the draw period?

    The HELOC has a 5 year draw period with an up to 10 year repayment term

    What are the limitations on HELOC advances?

    Advances are limited to 6 draws per quarter year and are required to be a minimum of $1,000 per draw

    When is my payment due?

    The HELOC payment is due on the last day of each month

    How do I make payments on my HELOC?

    The payments can be made by mail, in person, by automatic transfer, by payroll deduction, via online banking or via Tel-A-Cap

    Can I have HELOCs on multiple properties?

    Only one HELOC is available per member/community.

    How is the minimum payment calculated?

    1.50% of the outstanding balance (minimum $50.00).

    Can the interest rate be locked in?

    • The rate is variable and cannot be locked. (Rate and margin are based on credit history.)
    • If rate adjusts, it does affect the entire balance in use.

    Ex: Current prime is 3.50% + Margin of 2.00%= 5.50% interest rate. If the Prime goes up or down, they will always be 2.00% higher than that amount.

    Is there an annual fee?

    • The annual fee is waived the first year.
    • $60.00 Annual Fee will be assessed to the equity line on each anniversary date.

    What insurance is required?

    Proof of homeowners insurance is required. Proof of flood insurance is required, if applicable. No escrow will be required.

    Will there be a lien placed on my home?

    Your home will be used as collateral to secure the Home Equity Line of Credit. (Make sure member understands.)

  • The HELOC Application Process
    1. Gather your documentation. You will need to submit the following during the application process:

      ♦ Proof of income
      ♦ Homeowner’s and flood insurance with La Cap listed as mortgagee (or second mortgagee)
      ♦ Need full list of all necessary documents/information.
    2. Apply!  Apply online, call us at 800-522-2748 M-F 8 AM-6 PM, or visit your local branch. A lending representative will review your application and contact you within a few days.

      If an appraisal is needed, an appraisal fee may be required.
    3. Send your documents. Your lending representative will let you know if any documents need to be completed, submitted, or signed.
    4. Get approved! During this time, your lending representative will be handling all of the details. Once all of the proper documents and approvals have been filed or made, you will here back about the status of your application.
    5. Close on your loan. Once you’ve been approved, your lending representative will work with you and a Notary Public to schedule your closing. At the closing, you will sign all of your documents. All vested parties are required to be present and sign the closing documents.
    6. Enjoy your HELOC! After your loan is funded, you can use your HELOC right away or wait until you need it. To make an advance on your HELOC, you can:

      ♦ Use online banking to transfer funds to your depository account.
      ♦ Use Tel-A-Cap.
      ♦ Visit a La Cap branch or Co-op Shared Branch.

NMLS # 411413

*HELOC interest rates are variable, based on an index plus a margin and may vary after the account is open. The index is PRIME as published in the Wall Street Journal.  The rate effective on the first day of the billing cycle will be based on the index as of the last day of the preceding month.  The APR range is 3.50% to 7.75%. The rate is subject to adjust monthly. The margin will be based on your credit score, debt ratio, and loan to value – see lender for additional details. There is an annual fee in the amount of $60 which is waived the 1st year. The minimum loan amount is $10,000 with a required initial draw of $1,000. Twenty-four draws (6 per quarter) are allowed annually, with a 5 year draw period and a 10 year payback equaling a 15 year term. Monthly payments are 1.50% of the principal balance during the draw period and amortized to payoff in 10 years when the 5 year draw period is over. Property insurance with La Cap listed as lien holder is required, as is flood insurance if applicable. Loan to value allowed up to 80%. Higher loan to value will be determined on an exception basis. Closing cost will be $0.00 to $900. Closing cost does not include full appraisal fee if appraisal is required. La Cap will pay the closing costs; however, these costs will be charged back to the borrower(s) if the HELOC is closed within twenty-four (24) months of origination. Other restrictions may apply.