Other Home Loan Options
Understand Your Home Equity and Refinance Options
Whether you're looking to tap into the equity in your home, lower your interest rate or pay off your loan sooner, you have choices! Find out the differences between a refinance and a home equity loan to see what works best for you.
Benefits of Refinancing
There are lots of reasons homeowners choose to refinance. A refinance gives you the opportunity to lower your monthly payment, pay off your loan sooner or give you access to your home's equity in the form of cash. We have 2 types of refinance loans.
Mortgage Refinance Loan
With a mortgage refinance loan, you could qualify for a lower interest rate and save money. You could also adjust your loan term. Extending it may reduce your monthly payment. Shortening it could help you pay off your loan sooner—though your monthly payment might increase.
Cash-Out Refinance
With a cash-out refinance, you can access the equity in your home by taking out a new, larger loan and receiving the difference in cash. Top reasons for a cash-out refinance include home improvements, debt consolidation or major purchases.
Benefits of Home Equity Products
Home equity products let you access the equity in your home and put it to work for you. Common reasons include home improvements, debt consolidation, large purchases, or major life events. Navy Federal offers 2 options.
Fixed-Rate Equity Loan
A fixed-rate equity loan is a great option if you want to access your home's equity in one lump sum. You'll pay it back in monthly payments at a fixed interest rate.Footnote 1
Home Equity Line of Credit
A home equity line of credit (HELOC) offers flexibility. You borrow against your home's equity as you need it, when you need it, up to your maximum credit limit.Footnote 2
Loan Options That Give You Access to Your Home's Equity
| Loan Type | Fixed-Rate Equity Loan | Home Equity Line of Credit | Cash-Out Refinance |
|---|---|---|---|
| Best for | Interest-rate stability and preserving your existing mortgage (you could have up to 2 payments) | Flexibility to borrow as you need it and preserving your existing mortgage (you could have up to 2 payments) | Access a large sum while replacing your existing mortgage with a new one (you'll have 1 payment) |
| Loan Costs | No closing costs and no application or origination fees | No closing costs or annual fees and no application or origination fees | Closing costs are typically 2%-5% of the loan amount;Footnote 3 no application fees |
| Percent You Can Borrow | Up to 100% of your home's equityFootnote 4 | Up to 95% of your home's equityFootnote 4 | Up to 100% of your home's value, depending on the loan you chooseFootnote 5 |
| Loan Amount | $10,000 - $500,000 | $10,000 - $500,000 | Replaces your current mortgage loan amount plus cash-out |
| Rate Type | Fixed | Variable | Fixed- and variable-rate options |
| Term | 5-20 yearsFootnote 1 | 20-year draw period and 20-year repayment period | 15 years and 30 years |
| Access to Funds | Lump sum | Access funds as needed | Lump sum |
Additional Resources
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The Mortgage Refinance Process
Refinancing your home follows similar steps to purchasing your home. Learn what documents you'll typically need, what costs you could expect and how long each step could take.
Learn More about The Mortgage Refinance Process -
What Is Home Equity?
Learn about home equity—how you build it and how you can use it.
Learn More about What Is Home Equity? -
Home Equity FAQs
Have questions about a Navy Federal home equity loan? We've got you covered. Read answers to commonly asked questions here, or contact us with yours today.
Learn More about Home Equity FAQs -
Cash-Out Refinance
A cash-out refi lets you borrow a lump sum of money against your home equity. Weigh the pros and cons to see if this is a good option for you.
Learn More about Cash-Out Refinance
Ready to Apply or Have a Question?
Call us at 1-888-996-0313 to speak with one of our mortgage specialists.
Disclosures
Home equity loans are fixed-rate loans. Rates are as low as 7.340% APR and assume a 750 FICO on a 5-year term. Rates are based on loan term, credit history, loan-to-value (LTV)/combined loan-to-value (CLTV)/high credit loan-to-value (HLTV) ratio, loan amount, and occupancy, so your rate may differ. A sample fixed-rate equity loan monthly payment based on $100,000 at 7.650% APR for 20 years is $814.79. Taxes and insurance are not included; therefore, the actual payment obligation will be greater. Navy Federal will pay for all closing costs on fixed-rate equity loan applications. For loan amounts up to $250,000, closing costs that members may pay typically range between $300 and $2,000. Covered closing costs include lender fees and fees paid to third parties, such as settlement fees, credit reports, flood determinations, property valuations (including appraisals, if required), title searches, lender’s title insurance, recording, mortgage transfer taxes, and government charges. The member is responsible for escrow payments and/or prepaid costs, if required, including property taxes and assessments, homeowners’ and flood insurance premiums, association fees/dues and assessments, and prepaid interest. You must carry homeowners’ insurance on the property that secures this plan. All loans subject to approval. Offer is subject to change or cancellation without notice.
↵Home equity lines of credit (HELOC) are variable-rate lines. Rates as low as 7.500% APR and 8.500% for Interest-Only Home Equity Lines of Credit assume a 750 FICO. Rates are based on credit history, loan-to-value (LTV)/combined loan-to-value (CLTV)/high credit loan-to-value (HLTV) ratio, loan amount, and occupancy, so your rate may differ. A HELOC has a minimum APR of 3.99% and a maximum APR of 18%. Members who choose to proceed with an interest-only HELOC may experience significant monthly payment increases when the line of credit enters the repayment phase. Navy Federal will pay for all closing costs on HELOC applications. Covered closing costs paid to third parties include settlement fees, credit reports, flood determinations, property valuations (including appraisals, if required), title searches, lender’s title insurance, recording, and government charges. The member is responsible for prepaid interest and escrow payments for first lien HELOCs. Members must carry homeowners’ insurance on the property that secures the HELOC. For loan amounts up to $250,000, closing costs typically range between $300 and $2,000. Applications for a HELOC include a request for a HELOC Platinum Credit Card. All loans subject to approval. Offer is subject to change or cancellation without notice. Rates are subject to change. HELOC loans are not available in Texas.
↵Averages based on closing cost data from Navy Federal refinance loans since 2017. Your costs may differ depending on loan terms, fees, discount points, and other costs for required and optional services.
↵Product features subject to approval, which is based on an evaluation of credit history, loan-to-value (LTV)/combined loan-to-value (CLTV)/high credit loan-to-value (HLTV) ratio, loan amount, line amount, and occupancy.
↵Product features subject to approval. Occupancy restriction applies. Subject to funding fee, which may be financed up to the maximum allowed loan amount. Conventional loans: 100% financing available for purchase loans only. VA loans: 100% financing subject to all VA program requirements. Navy Federal has no affiliation with U.S. Department of Veterans Affairs or any other government agency.
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