Credit Union of Texas: 2023 Home Equity Review

Methodology

To create our Bankrate Scores, we evaluated lenders based on availability, affordability and customer experience. Availability was assessed based on the minimum loan amount required, time to approval, days to close, minimum draw requirements, minimum credit score requirements and loan types offered. Affordability was assessed based on minimum APR, discounts and promotions offered and associated fees. Customer experience was assessed based on online application and account availability, customer support, auto payment availability and mobile app availability and ratings.

Benefits

• There are no fees on most HELOCs, nor prepayment penalties, and if you opt for a HELOC up to $400,000, you won’t pay any closing costs.
• Credit unions tend to provide more personalized customer service than banks, primarily because they serve smaller geographic areas and are owned by their members.

Drawbacks

• You have to be a member of CUTX before you can apply for a home equity product. The lender provides lines of credit only on single-family, owner-occupied homes in Texas.
• Texas law limits the maximum combined loan-to-value (CLTV) ratio you can borrow to 80 percent. With some other home equity lenders, you could potentially borrow up to 95 percent of your home’s value between your first mortgage and a home equity product.

Types of fees charged

Credit Union of Texas doesn’t charge any fees on HELOCs under $400,000. However, you might still need to pay for an appraisal, which isn’t considered a lender fee, if you need one. There’s also no prepayment penalty, so you won’t be on the hook for a fee if you pay off your balance early.

While there are fees on the lender’s home equity loan, the exact amount isn’t disclosed. Check with a loan officer to get an idea of how much your home equity loan might cost.

Home equity loan products offered

Credit Union of Texas offers mortgage loans, mortgage refinancing, HELOCs and home equity loans (the latter have been paused as of this review).

With the HELOC from CUTX, you can borrow between $20,000 and $750,000 for first liens and between $20,000 and $300,000 for second liens. Remember, though, that your HELOC amount also depends on how much equity you have in your home, as there’s a CLTV ratio limit of 80 percent. During the draw period, the minimum draw amount is $4,000 each time you take a withdrawal.

Credit Union of Texas also offers a “Fast Track Loan,” which is essentially a fixed-rate HELOC designed to refinance a home loan. This product has a 10-year draw period, and you might be able to close in as few as 15 days.

How to qualify for a HELOC with Credit Union of Texas

Credit Union of Texas doesn’t disclose its minimum credit score requirements online, but it does prefer applicants with a score of at least 640. However, it offers quotes for all credit ranges, including for borrowers with no credit history.

• You must be a member of CUTX to qualify for one of its home equity products. The criteria for membership include:
• You live, work or attend an institution of higher learning in Dallas, Denton, Collin or Rockwall counties.
• You live or work in select areas of Grayson, Fannin, Ellis, Tarrant and Hunt counties.
• You’re a member of a school-related association or organization created to service or assist public or private schools.
• You’re an employee of a participating company or organization.
• You’re related by blood, marriage or adoption to someone who meets one of these qualifications or is already a member.

There are also requirements for your home. For starters, it must be in Texas, your primary residence and not zoned as agricultural. This can include single-family houses, condos, townhomes and duplexes. The lender doesn’t offer home equity products on mobile or manufactured homes.

How to get started

You can start the application process online, over the phone or at a local branch. If you want to start online, you’ll provide your name and contact information, your credit range and how much you’re looking to borrow. A loan officer will then reach out to you to complete the process. Once you close, there’s a three-day wait period before you can make your first draw.

If you have any questions, you can call a loan officer at 972-263-9497 Monday through Friday, 9 a.m. to 6 p.m. CT, and Saturdays, 10 a.m. to 2 p.m. CT. The credit union’s website also has a live chat feature and contact page.