BECU HELOC review: An option for fixed rates

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BECU HELOCs at a glance

Fixed or variable rate: Variable with the option to convert to a fixed-rate HELOC.

How to withdraw funds: Transfer funds to your checking account via BECU online banking.

Origination fee: No

Loan-to-value ratio: Unclear

Time to fund: Unclear

Boeing Employees Credit Union) is a regional credit union with more than 50 locations, mostly located in Washington state, plus two locations inside a Boeing plant in South Carolina. For much of its history, it limited membership to Boeing employees, but today anyone who “lives, works, worships or attends school” in Washington is welcome to join.

BECU offers home equity lines of credit, or HELOCs, as well as other financial products.

Pros

  • No application, origination or upfront fees
  • Credit limit of up to $500,000
  • Option to switch to a fixed-rate HELOC

Cons

  • Only available to BECU members
  • Rates are average compared to other credit union HELOCs
  • Underwriting criteria not listed online

4 things to know about a BECU HELOC

Let’s take a closer look at some of the key features of the BECU HELOC.

1. Only available to BECU members

BECU HELOCs are only available to members of the credit union, but this is a small obstacle for people who are eligible to join. Membership is free and begins when you open a BECU account. 

There are a few different ways to qualify, and you might be eligible if you …

  • Live, work, worship or attend school in Washington state
  • Live in select Oregon and Idaho counties
  • Belong to a partner organization, such as the University of Washington Alumni Association, Washington State University Alumni Association, NW Credit Union Foundation, KEXP or Sea Hawkers Central Council
  • Are a current employee, volunteer or retired employee of BECU, Boeing or a credit union, or a family member of someone who is

2. Fixed-rate HELOC advance option

A BECU HELOC starts out with a  variable interest rate. That means the rate — and your payments — can go up or down over time, based on market conditions. But unlike some other lenders, BECU gives borrowers the option to convert some or all of their HELOC to a fixed interest rate loan for predictable budgeting. 

With the fixed-rate option, you could borrow $5,000 or more and lock in a fixed interest rate for the length of the loan term. Depending on your needs, you could select a loan term from one to 15 years. If you want to borrow money for multiple purposes, BECU makes that possible: You can have up to three fixed-rate loans within your BECU HELOC. 

3. No application, origination or upfront fees

With a BECU HELOC, you won’t pay an application fee. The credit union doesn’t generally charge upfront fees, either. That means you likely don’t need to budget for origination fees, appraisal costs, title insurance fees, document mailing fees or escrow fees.

BECU also doesn’t charge a prepayment penalty fee, so borrowers have the flexibility to pay back their loan early. Some other lenders charge a fee if you choose to pay off your HELOC early. This fee varies but is typically a few hundred dollars.

4. Borrow up to $500,000

The maximum credit limit for a BECU HELOC is $500,000, but the credit union’s website doesn’t list the percentage of a home’s value that homeowners can borrow. Borrowers need to satisfy BECU’s underwriting criteria, but a minimum credit score isn’t listed on the website, either.

What’s the difference between a HELOC and a home equity loan?

HELOCs and home equity loans both use your home as collateral. That means you borrow against the value of your home, and if you don’t repay the loan, the lender can take your home to settle the debt.

Like a credit card, a HELOC is an open-ended loan that lets you withdraw and repay money as needed, up to your credit limit. This could be a good option if you don’t know how much money you need, such as when you’re planning ongoing home renovations or repairs.

A home equity loan works differently. Typically, you borrow a lump sum of money and must repay it over a set number of years. This could be a good option if you know you need to borrow a certain amount of money, such as for debt consolidation or school tuition.

Who is a BECU HELOC good for?

A BECU HELOC might be a good option for homeowners who have equity in their property and are eligible for BECU membership. The fixed-rate advance option may appeal to homeowners who want stable, predictable payments in a rising-rate environment. 

How to apply for a BECU HELOC

The application process for the BECU Home Equity Line of Credit is fairly straightforward. You can apply online in about 10 to 15 minutes, or if you prefer, in person at a BECU branch.

If you’re not a BECU member, you’ll need to apply for BECU membership and enroll in online banking before you can apply for a BECU HELOC. If you’re already a member, you can apply for a BECU HELOC via online banking. Applying in person at your local branch is also an option, but be sure to schedule an appointment first.

Whether you choose to apply online or in person, BECU recommends having the following documents handy:

  • Your Social Security number or Individual Taxpayer Identification Number
  • Valid U.S. government-issued ID, such as your driver’s license
  • Proof of address, such as a utility bill

Not sure if BECU is right for you? Consider these alternatives.

  • WaFd Bank: WaFd Bank might be a good option for people who want to use a regional bank but need to borrow more than BECU’s credit limit.
  • Bank of America: This national bank’s HELOCs may be a good choice if you want to explore another option that lets you convert to a fixed-rate loan.

About the author: Jennifer Gorman is an insurance and personal finance writer. She specializes in helping readers make sense of complex financial topics. Read more.