Make Your Home Equity Work for You
Northwoods Credit Union is running a limited spring-time Home Equity Loan Promotion*, making it a great time to put your home’s equity to good use!
What Is a Home Equity Loan?
One of the benefits of homeownership is building equity. Equity is the difference between the value of your home and the amount you owe on your mortgage.
- Example: If your home is worth $250,000 and you owe $150,000, your equity is $100,000.
- Typically, you can borrow up to 80% of your equity. Using the example above, you could take out a loan for $80,000.
- Use your home equity loan for:
- Home improvements (new roof, updated kitchen, etc.)
- Debt consolidation
- Other large expenses
Home Equity Loan vs. Credit Cards: A Cost Comparison
Many consumers carry high-interest credit card debt. A home equity loan can help save money on interest payments.
- Credit Card Interest Rate: Average 22.80% (source: Forbes)
- Home Equity Loan Interest Rate: 5.99%
Example:
| Loan Type | Loan Amount | Interest Rate | Monthly Payment | Total Interest Paid (5 Years) |
| Home Equity Loan | $20,000 | 5.99% | $386.66 | $3,199.04 |
| Credit Card | $20,000 | 22.8% | $561.97 | $13,717.31 |
| Savings | – | – | $175.31/month | $10,518.27 in interest |
Frequently Asked Questions
How Do I Apply?
You can apply:
- In person at any Northwoods Credit Union branch. We have locations in Cloquet, Moose Lake, and Floodwood.
- Online through our secure application portal.
- Over the phone with one of our Mortgage Originators.
How Long Does the Process Take?
You can expect to receive your funds within 30-45 days after applying.
Do I Have to Pay Off My Existing Mortgage?
No! If you have a great rate on your current mortgage, it remains unchanged. A home equity loan is a second loan secured against your home.
Do I Need an Appraisal?
It depends. Our Mortgage Originators will review:
- The tax value of your home
- Your existing mortgage balance
- The loan amount requested
- If needed, we may require a full appraisal to determine your home’s current market value.
What Is an Appraisal?
An appraisal is an independent professional evaluation of your home’s market value. It is conducted by a licensed appraiser who assesses factors such as:
- Recent sales of similar homes in your area
- Your home’s size, condition, and features
- The overall real estate market
An appraisal helps ensure that your loan amount is based on an accurate and fair home valuation.
How Much Are Closing Costs?
Closing costs vary depending on the loan amount and whether an appraisal is needed. Expect costs to range between $720 and $1,650. Contact a Mortgage Originator for a personalized estimate.
Do I Have to Pay Closing Costs Out of Pocket?
No, closing costs can be rolled into your loan amount.
Can My Interest Rate Change?
No. If you qualify for the special rate, it will remain fixed for the life of the loan.
What Loan Terms Are Available?
- Standard 10-year term
- 15-year terms are available at a higher interest rate
Am I Guaranteed the 6.10% Rate?
Not everyone will qualify for this promotional rate. To be eligible, you must have a credit score of 680 or higher. If your score is lower, you may still qualify for a home equity loan but at a higher rate.
What If I Don’t Know My Home’s Value?
That’s okay! We start by reviewing your tax value and then determine if a full appraisal is necessary.
*Not all applicants will qualify. Membership eligibility required. Equal Housing Opportunity. Federally insured by NCUA.
**Home equity special rate is limited-time, ending on 6/13/2025.