Thursday, July 28, 2016

Home Equity Line of Credit Frequently Asked Questions

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Getting in control of your finances doesn’t have to be difficult, but it can be hard to navigate through the vast amount of financial jargon. Take a look below at our frequently asked questions about home equity loans and lines of credit at Financial One.

General Information

- What is a home equity loan?
A home equity loan uses the equity in your home as collateral to secure the loan. The interest rate and monthly payments are fixed which guarantees you a steady and predictable repayment schedule for the remainder of the loan repayment.
- What is a home equity line of credit?
A home equity line of credit is a line of credit secured by your home with a variable interest. It is the maximum amount that you can borrow with a mortgage lender. When you borrow, you only pay interest on the amount of money you actually borrow—not the full line amount.

- Why should I choose a home equity loan or line of credit?
A home equity loan or line of credit with a fixed monthly payment will help your budgeting process for short-term and long-term needs much easier.
- Why should I refinance?
Refinancing loans can help you lower your monthly payment or interest rate on a current loan. You can also switch from a loan with an adjustable rate to one with a fixed rate to have a better idea of your monthly bills. Lastly, refinancing allows you to change the remaining term of a loan and refinance for a higher amount in order to pay off existing debt.

Loan Usage
- What could my home equity line of credit possibly cover?
A Financial One home equity line of credit (HELOC) is often used to cover education expenses, debt consolidation, home renovations and repairs. You can also use a HELOC to finance special life events, like weddings, a new baby, family vacations, and more.
- How can I protect my loan?
To provide the best possible coverage protection on your loan, Financial One offers a Payment Protection plan with Credit Life and Credit Disability insurance. The Payment Protection is available to safeguard your credit and collateral.

Rates and Repayments

- What rates are available?
Loan rates vary based on the loan, your mortgage history, and other factors. Visit our website to view a chart of available rates.
- What terms and repayment options are available?
Financial One Credit Union offers flexible loan plans. Our home equity installment loans feature a fixed annual percentage rate with flexible terms, ranging from 5 to 15 years. Home equity 5-year balloon installment loans feature a fixed annual percentage rate with a 5-year term and a repayment period of up to 20 years.
With loan amounts as small as $5,000, Financial One offers member-first, professional, and helpful service throughout your entire loan seeking process. Visit Financial One Credit Union for more information or apply online for a home equity loan or line of credit.

Tuesday, July 12, 2016

Home Improvement Appraisals: What You Need to Know

Have you been thinking about adding to or starting a renovation project to up the value of your home? Fantastic idea! The equity in your home can be your most valuable asset. There are a few things you need to know when it comes to increasing the value of your home, especially in the eyes of an appraiser.

Cost Does Not Equal Value

The amount you spend on renovations to your home doesn’t automatically add to the value of your home. Appraisers don’t simply add up the cost of your renovations to determine the new value. The value of a renovation is determined on how much a buyer would be willing to pay for them - so additions that no one wants to pay for will end up costing you money.


Take, for instance, the principle of substitution. This describes the idea that a buyer won’t pay more for a special feature in a home than the cost of renovating a similar property. To break it down, visualize two homes. Let’s say these homes are identical, except one has undergone a bathroom remodel that cost $30,000. Now say the other home could have the same remodel done for $15,000. Buyers would be more inclined to purchase the second home and do the remodel themselves, saving an extra $15,000. Thus, the owner of the first home wouldn’t recoup the full $30,000 for their bathroom renovations, but the $15,000 it would cost to get the same features in another home.

Know the Difference Between Improvements and Bad Investments

Some additions to your home are a good idea, while others could actually take away from the value of your home or drive away potential buyers. Take a look at our list below:

Improvement: Energy conservation
Energy conservation improvements, such as high-efficiency windows, solar water heaters, water-saving toilets, etc, are key to a good appraisal. Many buyers are looking for green homes, and improvements can be large or small scale.

Bad Investment: A Pool
A buyer’s children might get excited at the concept of a pool, but many buyers will look at it as a source of constant upkeep, a potential hazard for their children, and not worth the added work in cooler states (ie: Minnesota).


Improvement: Bathrooms and Kitchens
Experts agree that the best renovations you can make in your home are updates to your kitchen and bathroom. Entryways and front door replacements are a good idea as well, but kitchens, especially, should be on the top of the list for renovation projects.

Bad Investment: Special Interest Projects
Specific interest projects such as turning the spare bedroom into a library or the den into a wine cellar are also bad investments. These rooms are fun to add in relation to your own personal style, but potential new buyers will not want to spend the money remodeling a room to fit their own interests.

Bad Investments: Basements
Homeowners treasure a refinished basement, but many appraisers and buyers do not. When it comes to spending money on the value of your home, don’t put your assets in the basement. Basement renovations recoup a little over half of their cost to the value of the home. In the eyes of an appraiser, an attic project will count for more than the basement.

When you start thinking about additions to your home to up the resale value, think about them through the eyes of an appraiser. Though it may not bring up the value of your home, keep your home tidy and declutter extra furniture and decor items. This will make your home seem more open and easier to appraise. When you do decide on renovation projects, document all your renovations. If you put money into your home, be prepared to prove it. Before and after photos don’t hurt either.

For more tips on renovation projects and home appraisal, check out the Do’s and Don’ts of Home Appraisal from