home equity lines of credit

Choosing An Equity Loan In A Rising Rates Environment

/ destinationscreditunion / Leave a comment

Interest rates are expected to climb soon. What are the differences between a home5b368-house2bmoney equity line of credit (HELOC) and a typical home equity loan? How does an environment of rising interest rates impact each choice?

It’s true that most financial experts are predicting an interest rate hike (or multiple hikes) this year. With rising rates, borrowing against the equity of one’s home will likely become a more popular choice. That’s because people will choose to fund home renovations and other high-priced needs with their equity instead of moving to a new home with a mortgage that has higher interest rates. Refinancing their existing mortgage for a lower payment will no longer be a viable option either, since they probably already have a great rate they won’t want to give up.

With that said, here are some basics you’ll want to know about each kind of loan:

HELOCs

1.) How they work

A home equity line of credit is a revolving credit line that allows you to borrow money as needed to a limit, with your home serving as collateral for the loan. Lenders approve applicants for a specific amount of credit by taking a percentage of their home’s appraised value and subtracting the balance owed on the mortgage. They may also consider any outstanding debt you have, your income and your credit history.

If you’re approved for a HELOC, you can spend the funds however you choose. Some plans do have restrictions, though, and may require you to borrow a minimum amount each time, keep a specific amount outstanding or withdraw an initial advance when the line of credit is first established.

2.) Pros

HELOCs allow for more freedom than fixed home equity loans. Since you’re opening a line of credit and not borrowing a set amount, you can withdraw money as needed from the HELOC over the course of a set amount of time known as the “draw period.” This is especially beneficial if you’re renovating your home or using the money to start a new business and don’t know exactly how much money you’ll need to fund your venture.

Repayment options on HELOCs vary, but are usually very flexible. When the draw period ends, some lenders will allow you to renew the credit line and continue withdrawing money. Other lenders will require borrowers to pay back the entire loan amount at the end of the draw period. Others allow you to make payments over another time period known as the “repayment period.”

Monthly payments also vary. Some require a monthly payment of both principal and interest, while others only require an interest payment each month with the entire loan amount due at the end of the draw period. This can be beneficial when borrowing for an investment or business, as you may not have the funds for repayment on a monthly basis but anticipate earning enough to pay back the entire loan.

3.) Cons

HELOCs have variable interest rates. This means the interest you’re paying on the loan can fluctuate over the life of the loan, sometimes dramatically. This variable is based on a publicly available index, such as the Wall Street Journal Prime Rate, and will rise or fall along with this index. Lenders may also add or subtract (Destinations Credit Union’s rate is Prime Minus 1%*) a few percentage points, called margin, of their own.

Obviously, taking out a HELOC in an environment of rising interest rates means your rates are likely to increase over the life of the loan. In addition, HELOCs that only require repayment of principal at the end of the term can also prove to be difficult for some borrowers. If you have trouble managing your monthly budget, you may not be able to pay back the full amount on time. In that case, you will be forced to refinance with another lender, possibly at an unfavorable interest rate.

Home Equity Loans

1.) How they work

A home equity loan, also secured by your home’s equity, allows you to borrow a fixed amount that you receive in one lump sum. The amount you will qualify for is calculated based on your home’s loan-to-value ratio, payment term, your income and your credit history. Most home equity loans have a fixed interest rate, a fixed term and a fixed monthly payment.

2.) Pros

The primary benefit a fixed home equity loan has over a HELOC is its fixed interest rate. This means the borrower knows exactly how much their monthly payment will be for the entire life of the loan. In an environment of rising rates, this is especially beneficial for the borrower, as their loan will not be subject to the increasing rates of other loans. Also, the interest paid on a home equity loan is often 100% tax deductible (consult your tax advisor for details).

Unlike the repayment policy of HELOCs, every payment on a home equity loan includes both principal and interest. Some loans allow borrowers to pay back larger sums if they choose, but many will charge a penalty for early payments. Regardless of policy, at the end of the loan term, the entire amount is paid up and you can forget about the loan.

3.) Cons

Generally, fixed rate Home Equity Loans start out at a higher rate than HELOCs, so rates must rise a lot to make this the better deal for interest rates.  Taking out a fixed home equity loan means paying several fees. Receiving all the funds in one shot can also be problematic if you find that you need more than the amount you borrowed. Also, the set amount is due every month, regardless of your financial standing at the time. And, of course, if you default on the loan, you may lose your house.

Carefully weigh the pros and cons of each kind of loan before tapping into your home equity. Shop around for the best rates and terms, and be sure to calculate whether you can really afford the monthly payments of your chosen loan.

Don’t forget to call, click, or stop by Destinations Credit Union to find out about the loans we have available for you.

Your Turn: Have you ever borrowed against your home’s equity? Share your experience with us in the comments!

SOURCES:
https://www.franklintempleton.com/investor/campaigns/templeton-global-bond-rising-rates?gclid=CjwKEAjw5_vHBRCBtt2NqqCDjiESJABD5rCJP3FZKzsQc7EeIo3T0s4DMxIgvNCsL4At-X8K8nzR7BoC5-fw_wcB
https://www.google.com/amp/www.csmonitor.com/layout/set/amphtml/Business/Saving-Money/2017/0219/Why-a-home-equity-loan-is-a-smart-choice-as-rates-rise
http://www.schwab.com/public/schwab/active_trader/trading_insights/trading_strategies/6_strategies_for_dealing_with_rising_interest_rates.html
http://homeguides.sfgate.com/choose-home-equity-loan-2651.html
http://online.wsj.com/news/
http://files.consumerfinance.gov/f/brochure.pdf
http://www.realtor.com/home-finance/homebuyer-information/what-are-liens-on-a-home.aspx

Keep Yourself Safe During The Holiday Season

/ destinationscreditunion / Leave a comment

Every year, we hear about the same holiday safety tips – don’t drive tired, don’t drive drunk, assume every other driver is drunk and/or tired, etc. Those are all good ideas to keep in mind year-round. Occasionally, we’ll hear one that’s specific to the season, like how frying turkey in the driveway is as dangerous as it is delicious, and it’s also not something to try while drinking or overly tired. Unfortunately, this time of year is also one of financial dangers, many of which you won’t hear about on the morning news or read about in the paper.  Take some time, read our tips, and hopefully you won’t be a holiday victim. 

Keep an eye on your surroundings – Crowded malls and shopping centers are a savory opportunity for pickpockets.  You’re expecting to get bumped and won’t notice one more jostle in a day full of them.  If you do recognize you’ve been robbed, the thief can probably get away into the crowd, disappearing like a needle in a haystack.  Purses should be worn across the body, wallets kept in the front pocket or inside a closed jacket.  Consider leaving the house with the bare minimum, such as your driver’s license or ID, health insurance card and our debit card – which offers fraud protection and security features not available with cash. 

RFID, RFID, RFID – Today’s pickpockets don’t need to take your wallet to cause you problems, because many modern debit and credit cards emit RFID signals with personally identifying information.  If any of your cards have a chip, then you need to account for them. Check our RFID wallet guide for some tips. In a pinch, you can wrap chipped cards in two layers of aluminum foil, which will offer you protection from high-tech pickpockets, but you may get some bewildered stares or questions from folks at the register.

 

Don’t leave checks in the mailbox – At some point, we all learned not to use those colorful envelopes that tell thieves which cards might have checks in them, but we never learned the next step: Don’t put checks in the mailbox at all.  It’s not hard for thieves to grab stuff out of the outgoing mail, whether it has the power company’s name on it or is shaped like a holiday card.  Drop all checks into a big blue mailbox, bring them into your post office branch, or hand them to your postal carrier in person.  By the way, this tip should be followed year-round, and you might want to consider setting up our online bill pay feature to minimize the number of checks you write, as well. 

Understand the dangers of every form of payment – Every form of payment has its dangers.  Cash is portable and untraceable, so it’s a target for thieves.  Cards without EMV chips are in danger from skimmers built into the card reader at registers (like what happened at Target).  EMV cards can be skimmed by people with specialized equipment who bump up next to you.  All cards, cash and mobile phones are in danger of being stolen.  Some experts are even saying that check fraud will be the most dangerous type of identity theft over the next five years.  Even if you attempt to return to agrarian-era bartering, an enterprising thief could run off with the cow you were going to trade for an Old Navy gift card.

Take a breath, recognize the dangers and take reasonable precautions. Do you know what kind of fraud protection you have on each of your credit cards?  Any card about which you’re unsure needs to stay home until you find out.  Unsure about a small boutique’s cyber security? Bring cash. 
Bring your own bag – Shopping bags are a great way for stores to advertise, but they also advertise to thieves.  “This overburdened, overtired, potentially unwary individual is carrying goods from all of these stores,” the bags say “some may even have receipts in them and might have been paid for with cash.” Don’t make it easier for thieves. Instead, bring a tote bag that zips up if you have one, or your canvas grocery bags if you don’t. 
Take a trip to the car – Carrying too much is asking for trouble.  It makes you less mobile, you’re less likely to feel someone remove an item from your bags, and even if no one hassles you, it’s a good way to end up with back pain.  If you’re enduring a marathon trip to the mall, take time every few stores to take your purchases out to the car. Keep receipts in your wallet and take pictures of the bags you put in your trunk (where thieves can’t see), so even in the worst possible scenario, your car insurance can cover the loss of your shopping from a car thief.
Plus, you’ll have less to carry, you’ll get some exercise, and the cold air can help you clear your head to decide if you need to purchase anything else.  Not a bad way to keep from overspending! 
Buy yourself a holiday drink from the coffee shop – You’re probably safer if you’re alert, but that’s just an excuse.  Holiday coffee drinks are delicious, you want one, and we just gave you an awesome excuse to justify the everyday luxury of a peppermint mocha to yourself.  You’re welcome. 
January is coming, be ready – If you’re going to binge on holiday shopping in December, you’ll need to purge in January.  Keep all of your receipts and do an extra-careful reconciliation of your accounts in January.  Be ready to spend a few afternoons making phone calls to make sure every charge is correct and accounted for.  Make sure to check your credit report in January as well.  While you’re checking your credit and your accounts, take the opportunity to start the new year off right:  you have your financial info gathered already, you have your credit report in front of you and your W-2s are starting to show up, so it’s time to do three things:
  1. File your taxes.  Don’t get mad at us, it’s not our fault.  We’re only reminding you to do it early because you’ll already have most of what you’ll need, so getting your homework done on Friday will give you the rest of the weekend off. And don’t forget to have any refund directly deposited to your Destinations account.
  2. Rework your debt.  You have every one of your credit card and other account statements in front of you, so it’s time to make some calls.  For your higher interest cards, it’s time to pay them down, transfer the balances to a MasterCard at Destinations Credit Union or negotiate a lower rate.  This is easier if you’ve got some cash in hand, possibly from the tax refund you now know you’re getting.  You can also take this time to explore using your home equity to eliminate some of the high-interest cards. 
  3. Set up a Holiday Club for 2016.  Alright, you just saw how much money you spent this holiday season.  Next year, resolve to do it all without taking on unnecessary debt.  You’ll save a ton of money and a ton of stress.  The best way to do that is with one of our Holiday Club accounts.  Use this year’s budget as a guide. Next year will be a breeze.

And that’s it.  It sounds like a lot, but it’s really taking the same level of vigilance you would use for normal shopping and increasing it to correspond with the increased spending of the season.  For a good rule of thumb, maybe we should just establish the “3-Mariah” rule:  Once you hear Mariah Carey’s “All I Want for Christmas is You” for the third time on any day, you have to go home – you’ve either spent too long at the mall, or your brain has been turned into holiday slurry and you can no longer be trusted to remain vigilant.  Three Mariahs and you’re out.

It’s Almost Halloween, So Let’s Talk Christmas

/ destinationscreditunion / Leave a comment


Football has begun, the leaves are changing and the kids are back in school. Clearly, it’s time to start thinking about Christmas.  Some of you are reading this on your phone while waiting in line at Starbucks, preparing to buy your first Pumpkin Spice Latte of the season, but it’s time to start thinking of peppermint mochas instead.  Even if you’re the “Bah, Humbug” type of person who regularly posts Facebook rants about the neighbors putting up their lights before Thanksgiving, making financial plans for the holiday is still a really good idea.  It might be too early to hang a stocking, but it’s never too early to sock money away.

Question: How much will I be spending on the holidays this year?

Answer:  Recent studies have pegged the price of the holidays at roughly $300 per child, while one in 10 shoppers admit to spending over $500 on gifts for their children.  Overall, Americans spent about $600 billion on Christmas last year, which comes out to around $2,000 per person. This includes decorations, hams, ugly sweaters, and whatever else you tend to buy.  That’s a lot of money.

Question:  Ugh.  Why are we even talking about that money now? It’s not even Halloween!

Answer:  Halloween is exactly why we should make plans now.  Since 2005, American spending on Halloween has spiked.  Last year, we spent about $7 billion on Halloween, including $350 million on costumes for our pets!  It’s easy to overspend in October, let that lead into an indulgent Thanksgiving in November, and then find ourselves putting all our Christmas spending onto a high-interest-rate credit card.  Planning ahead is a necessary step to prevent you from a holiday hangover in the New Year.

Question:  How bad is it to put Christmas on a credit card?

Answer:  It might be worse than you think.  It’ll cost you about $200 per month to pay off an average Christmas debt in time for next year if using a typical high-interest credit card. And if you don’t pay it off by next year, you’re suddenly trying to pay off two holidays at once. That’s bad news.  Even if you think you can handle the extra debt load, remember that the Fed just raised rates, and it may do so again. Whenever it does, you can expect your credit card bill to go up.  On top of all that, paying around $400 in interest charges and fees over the course of the year is still $400.  That’s probably enough money to turn your average Christmas into something worthy of a televised Christmas special.  If you have to use a credit card, make sure it’s a low rate card like your Destinations MasterCard.

Question:  Is it too late to get ahead for this year?

Answer:  Not at all.  You have a lot of options to save yourself from your own spending.  You can sign up for a Holiday Club account, a High Yield Account or a variety of other plans.  But that’s not the only approach.  You can also get ahead of the rate hikes by moving all of your credit card debt into a home equity loan (check out our rates) or signing up for one of our low-interest credit cards.

But even all those options don’t represent all the various ways to save money. Remember that Christmas spending doesn’t have to be an all-or-nothing proposition.  You can combine savings, credit cards and budgeting to attack the holiday from several angles.  Start now, and by Christmas you’ll have a well-stocked war chest, or in this case, toy chest, to give you a variety of options.

Question:  What about the holidays between now and then?

Answer:  Between Halloween and Thanksgiving, Americans spend around $150 per person on average, which is far more affordable than Christmas. But that can still add up quickly, especially in larger families.  It can also be difficult to tighten the belt at this time of year, because it can mean less candy and less family time for the kids.  If you’re worried about this spending, one way to rein it in is to make a combined holiday budget you pay into every month.  Figure out how much you plan to spend on birthdays, holidays, anniversaries and the like, then divide that by 12.  That’s how much you need to put away every month.  Does that sound like a lot of money?  Then you can cut down all year long.  Maybe you don’t need to send birthday gifts to as many people or your anniversary can be a smaller occasion this year. The bottom line: If you start planning ahead, you can keep your holiday spending from being an obstacle to your financial future.

Sources:

http://www.bankrate.com/calculators/credit-cards/credit-card-payoff-calculator.aspx?MSA=&&&&

http://theeconomiccollapseblog.com/archives/guess-how-much-americans-plan-to-spend-on-christmas-and-halloween-this-year
http://www.today.com/parents/yes-we-spoil-our-kids-6-000-moms-come-clean-1C7397939
http://www.theatlantic.com/business/archive/2011/10/the-halloween-economy-2-billion-in-candy-300-million-in-pet-costumes/247531/
http://abcnews.go.com/WN/mailform?id=14998335

4 Home Improvement Projects With High Long-Term Return

/ destinationscreditunion / Leave a comment


When you’re making improvements to your home, you’re not just making your life better in the short term. You’re also making an investment in your future. Ideally,  the increase in the value of your home will exceed the cost of the improvement.

However, it seldom works out like that. The most efficient home improvements don’t pay for themselves immediately. The first item on this list has an ROI of 98%. That means you get back 98% of the money you put into it. To look at it another way, you lose 2% of your initial investment.

It takes years for the appreciation in your home to recoup the expense of an improvement. If you’re looking for an investment, putting your money in a share certificate or other long-term investment option will net you more. When you’re making home improvements, though, you’re looking for ways to improve your quality of life while being as thrifty as possible.

Calculating ROI can be difficult because the data is based on national averages. For instance, in drought-afflicted parts of the country, water-efficient fixtures, rainwater collection facilities and low-water landscaping will pay long-term dividends. In places with lots of solar exposure and high utility costs, solar panels will make your home more cost-efficient and attractive to buyers. No one will pay more for a well air-conditioned house in Alaska! Keeping that in mind, finding out what works for your market therefore depends a lot on trends and local conditions.

There is some good news if you’re looking for more universal approaches for getting the best increase in value for your home improvement dollar. There are a few simple rules to follow. Seek relatively low-cost improvements that require little to no maintenance. They should immediately distinguish your house from similar homes and, ideally, they also improve the energy efficiency of your home.

Here are four home remodel projects that can improve the resale value of your home. They’re excellent uses for your home equity line of credit (HELOC) and you may be able to save money by doing part or all of them yourself! By the way, consult your tax advisor to determine if those improvements apply for tax deductions. 

1.) Replace the front door 

There’s an old adage in real estate that suggests the features get tours, but the front porch gets sales. People make decisions on home-buying all the time by starting with a gut reaction and finding reasons to support it later.

Why not start your home remodeling project with the first thing you interact with on your house: the front door. Upgrading an old, poorly-fitting front door with a newer energy-efficient model is a cheap, quick project that can instantly improve your home’s efficiency and aesthetic appeal. Best of all, hanging a door can be done in an afternoon!

With an average price of just over $1,200, including labor, an energy-efficient front door has an ROI of 98%! It’s also a chance to be creative. A new front door can add a splash of color and window placements can break up a monotonous front profile. 

2.) Minor kitchen remodels 

Replacing major appliances and installing new flooring is a difficult, time-consuming, and expensive task. Being without a kitchen for weeks on end can be a nightmare and the number of professionals needed to install new lighting and other features is mind-boggling. The national average for spending here is $57,000, and the ROI for major kitchen remodeling isn’t great, at only 68%.

Minor kitchen upgrades, like new cabinets, counter-tops, and energy-efficient cook-tops, are comparatively inexpensive. The average spend here is just under $20,000 with an estimated return on investment at an impressive 80%. Just like with the front door, the changes are mostly aesthetic. People perceive a more modern-looking kitchen as being a better fit than a more “retro” look.

This is also a chance to customize a place where you spend a remarkable amount of time. Having a kitchen laid out just the way you like it can make it easier and more enjoyable to cook. This will encourage you to eat more meals in, and energy-efficient appliances can lower your electric bills for the life of the home. 

3.) Wooden decks 

Outdoor space is one of the hallmarks of the current iteration of the American dream. Where else can a family sit and enjoy a frosty lemonade on a hot summer day? Watch the kids play in the yard while tending the grill on a beautiful wooden deck!

Wooden deck additions were unpopular for years, as consumers see them as luxuries. During a recession, remodeling dollars tend to focus on needs, like kitchen and bedroom updates. Now that the economy is improving, more people are looking at decks as valuable extensions for their living space.

The average cost, based upon a 16 foot by 20 foot wooden deck, is $10,000. The average return on investment is just over 80%. This is because of the perception of expanded living space at a reasonable price. Adding a deck costs about $35 per square foot, while a square foot of inside space costs an average of $85! Decks are a great way to increase the play space for a modest cost.

Bear in mind that just like the air conditioning in Alaska, a deck in a climate where the climate in inhospitable outdoors for much of the year will not have as much value as one in more temperate climes. 

4.) Convert an attic space into a bedroom 

For most houses, the attic is an afterthought. It’s a place where unused craft projects and abandoned hobbies go to die. Consider turning that dead space into living space with a remodeling project!

Turning an existing attic space into a spare bedroom or office, complete with its own bathroom, can be done for a slightly steeper price. Nationally, the average cost is just over $50,000. That includes constructing a room, extending utilities to it and adjusting the exterior of the house to accommodate the new space.

This remodel provides a 77% return on investment in resale value, with the potential for more. If you have adult children or relatives visiting from out of town, an attic room can be a wonderful guest room. You could also rent it out for additional income!

Contact Destinations Credit Union if you need help in financing your next home improvement project!  

SOURCES:

Home Equity: Loans Vs. Lines of Credit

/ destinationscreditunion / Leave a comment

If you are looking for funds to improve your home, using the equity in your home can be a great way to finance the improvements.  Using the equity in your home is not something to take lightly, but if you are doing something to improve the value of the home, it can be well worth your while. 

What is My Equity?

The available equity in your home is calculated by taking the current market value of the home (as determined by an appraisal) and subtracting the current mortgage balance.  Destinations will loan you up to 80% of that amount.  To get a rough idea of what your home is worth on the market, you can check internet sources, such as zillow.com, for recent sales of homes in your neighborhood.

Loans Vs. Lines of Credit

A Home Equity Loan is a fixed-rate, fixed-term loan.  The payment and the interest rate are constant over the agreed-upon term.  Therefore your payment amount will not fluctuate.  You cannot borrow against the equity again until the loan is paid off.

A Home Equity Line of Credit (HELOC) is an open-ended loan that you can borrow against any time you need the funds.  The line of credit is up to 80% of the equity in your home.  The rate on the line of credit is generally lower at the time you apply because it is a variable rate.  As market rates rise, so may your interest rate.  With a HELOC, you can draw against the line whenever you need the funds. 

Both options provide low rate loans to accomplish your goal.

With Destinations Credit Union, our HELOC rates are the Prime Rate minus 1% with a floor of 4%.  Since the Prime Rate is now at 3.25% (and has remained so since the end of 2008), our current rate is 4% Annual Percentage Rate.  Prime would have to rise to more than 5% before the rate would rise on our HELOC.

If you are interested in exploring a Home Equity Loan or Line of Credit, contact us through our website or give us a call at 410-663-2500.

Three Famous Scary Stories And What They Teach About Smart Money Management

/ destinationscreditunion / Leave a comment

It’s that time of year again! The nights get longer. Haunting winds rattle

shutters and swaying trees cast spooky shadows in the moonlight. It’s time to tell ghost stories!

These stories scare us, but they can also show us something. Let’s see what three of the most popular ghost stories can show us about financial responsibility for a spook-tacular Halloween!

1) The Ghost in the Attic

The story

It starts a little differently each time. Maybe there’s a bump in the night. A squeaky floorboard creaks and groans even when no one is walking near it. More and more squeaks and bumps that no one can explain keep happening. The cabinets open and close by themselves. Loud noises come from nowhere in the middle of the night. Everyone is terrified and no one can sleep. Blood starts dripping from walls as screams come from the vents and doors slam. This house is haunted.

It turns out there’s some history to the house. A gruesome murder took place there. It was built on an ancient Native American burial ground. The attic was home to an abandoned child who was forced to live there because of his hideous deformity. The only way to get back to normal is to give these angry spirits what they need.

The reality

If your house has creaking floorboards, or your heating and cooling system goes bump in the night, you might be headed for a far more serious problem than ghosts. Unexplained noises in the house could be signs of serious structural problems. Knocks in the walls can be a plumbing issue about to break loose. Uneven construction can really make cabinets open by themselves and doors slam uncontrollably. Like in the story, many of these problems come out of your house’s history. It might have been built on an old mine site or just built in a hurry.

Left untreated, these little problems can create big trouble. Squeaky floorboards can break, pipes can rupture, and foundation problems can ruin your home. If you’re counting on homeowner’s insurance to pay for these accidents, think again. Homeowners’ insurance policies broadly don’t cover “construction defects,” which means you’ll be stuck holding the bill.

Consider getting out in front of these problems. You can use your home equityline of credit to repair your foundation, fix structural problems in your home, and perform other necessary upgrades. Don’t let the specter of uncertainty ruin your ghoulish good time!

2) Vampire Infestation

The Story

Up a winding mountain pass deep in the Transylvanian high country sits an ancient mansion. The simple folk who live in the valley will not go near it, nor will they even speak a word about it, for fear of attracting the dark attention of the master of the house. The man is never seen and the house might be assumed empty if it were not for the ominous cackling that echoes through the farms and pastures that surround the mountain.

 Legend tells that the man in the mansion is an unholy abomination who subsists on the blood of the innocent. Young children have been found by the road leading up to the mansion, their flesh cold and clammy as though the life itself has been drained out of them. Travelers who arrive at the village scoff at the tale of Dracula’s Mansion, but those who journey up to it are never seen again.

The Reality

While you don’t have any vampires in your life (probably), you do have something you never see that’s sucking the life out of your financial success. Outstanding debt is a seldom-seen figure that casts an ominous shadow over your household finances. Make no mistake: The beast is feeding on your innocent salary and putting your whole household in its sight. The average household has $17,000 or more in debt and faces an average minimum payment of $423 per month.

If you want to drive a stake through the heart of this monster, consider a debt consolidation loan. These loans can repair your credit, lower your monthly payment and free you from the control of the heartless creature. Best of all, you won’t need to deal with the smell of garlic!

3) Zombie Apocalypse

The Story

The streets are quiet. There are no cars or pedestrians. An overcast sky casts flickering shadows on the desolate streets. The ordinary noises of a city are starkly absent. The only clearly audible sound is the slow chomping of the walking dead who are feasting on the bodies of recent victims.

Cowering in basements and perched on rooftops, human survivors band together. Their goal is simple: stay alive for one more day. Long past the point where rescue helicopters stop flying, these brave souls will go their own way and resist being part of the zombie horde.

The Reality

Zombies are a cautionary example of what happens to us when we consume just for the sake of consumption. A zombie is a sad creature who lacks the capacity to plan or see further than the next meal. We’ve all been there – splurging on a candy bar in the checkout lane, not because we were hungry, but because we wanted it and it was there.

The best way to zombie-proof yourself is to make a realistic budget and sticking to it. Make a plan for your income that includes saving and investing. Be sure to include space for planned indulgences – like discount Halloween candy on November 1.
SOURCES:

http://www.free-online-calculator-use.com/credit-card-minimum-payment-calculator.html

Top 7 Home Improvements You Can Do Yourself With A Little Help From Destinations Credit Union

/ destinationscreditunion / 1 Comment

Stop and take a look around your house. Are you delighted with everything in it? This is where you spend a good portion of your day, and where you and your family build happy memories. There’s no reason why it should be anything less than your dream home.

It can be expensive to hire a professional to redo some part of your home, and choosing a contractor can be a stressful process. Instead of shelling out tens of thousands for a contractor, why not consider these great home improvement ideas that you can do yourself!

1) The deck of your dreams

With cooler fall weather on the way, you might be thinking about turning your boring outside space into an outdoor living room! Whether you’re after a raised wood deck to give your guests someplace to sit or a classy brick patio for lounging by the grill, a usable outside space can make a big difference in how you enjoy your home. The charming visual addition to the outside of your home is a great way to add value, too.

While this is a big project, it’s big on rewards, too. Start by drawing up some plans – remembering that you’re basically building a series of wood boxes that are bolted together. Draw up a shopping list of things you need, and head over to Destinations Credit Union to get the financing done. Then, head to your local home improvement store for lumber, bolts and a few new power tools.

2) Paint a room … or a whole house!

If you’re not feeling up to building much, you can make your house feel new again with a fresh coat of paint on the interior. Choose colors that complement your furniture and flooring, but choose slightly different shades for different parts of the house. Maybe you want to paint your kitchen and dining room in mellow earth shades to give it a sense of coziness, but you want to paint your bedroom a calming blue to help you sleep.

This can be a great project to get the kids involved in, too. Wall paint, sponges, and scissors can let children paint fun and imaginative shapes on their walls. A sense of ownership over the design might encourage them to help keep it a little cleaner as well. You can get creative in main spaces, too! Try painting an accent wall to change the light effects in your living room! Aside from paint, brushes, and rollers, make sure you get covers for furniture and floors and painters’ tape.

3) Fix up an entryway!

Your front door is the first thing people see when they come into your home. You want to make sure it says great things about you and your family. A little bit of time and effort can make this part of your house feel more welcoming while also saving you time and effort.

You can make relatively minor changes here. Metal house numbers, trim paint and a few planters can make your front stoop look much nicer. You can also make some serious investments. A new door can really liven up the front of your house. New weather stripping can make your front door more energy efficient to save on winter heating costs. Nice light fixtures can take a little time to install, but they can make your house both more charming and a little safer. Sketch out some ideas, then head to your home improvement store to figure out what you need to make your front door the talk of the neighborhood.

4) Add a splash of class with a tasteful backsplash

The section of wall above the sink can see a lot of water damage. Left uncovered, this can lead to mildew and even mold behind the sink. A backsplash is an attractive option for preventing that damage.

While these are typically done in tile, there’s nothing stopping you from looking at wood bead board, ceiling tile or wallpaper. You could even turn them into a functional addition to your organization system with chalkboard, whiteboard or magnetic film! Write up a recipe or meal plan to help keep your prep work organized in the kitchen, or write a fun morning greeting to your kids in the bathroom! There’s no limit to what a backsplash can do for your home. Head down to your local home improvement store to see what kind of material you want to use, and don’t forget to pick up adhesive to stick it all together!

5) Create a new outlook with new windows!

Installing new windows can seem like a daunting task, but they’ll pay for themselves. Energy efficient windows with new molding and stripping can significantly reduce your energy bills. Plus, having new windows and screens will make your home look well-cared-for when it comes time to sell.

Do some research on energy efficient two- and three-ply windows. Figure out which will both fit your budget and hold long-term value. Remember, though, that the general rule is you get what you pay for. Cheap windows won’t conserve much energy.

6) Refresh a tired kitchen or bathroom with new fixtures!

Your faucets and knobs see a lot of abuse. They get touched by grimy hands, splashed by soapy water and can build up calcium and rust even if you’re careful about washing them. Because they’re usually metallic, they tend to draw a lot of eyes. Dull, streaky fixtures can suck all the energy out of a kitchen or bathroom.

Replacing them, though, is pretty easy. In the bathroom, you can get sleek, modern fixtures that will save you sink space for storage. In the kitchen, consider getting a detachable head with a vegetable sprayer to make cleanups easier. Whatever you do here, you’ll end up with a nicer looking kitchen or bathroom.

7) Bring your stuff together with built-in storage!

If your house looks like most others, it’s chock-full on the inside with memorabilia and keepsakes. Tossed about the room, this can look cluttered and dingy. It makes it hard to clean and dust. Adding more furniture, though, can make a space feel cramped and tiny.

Instead, think about adding more built-in storage. Whether you just want to hang a shelf over an entryway, put some coat hooks by the door, or build a bookshelf into a living room wall, built-in storage is a great way to display your treasured memories without shrinking a room with too much stuff. Installing it requires lumber, mounting tools and a few other gadgets that DIY experts should have no trouble identifying.

When it comes to improving your home, Destinations Credit Union is ready to be a partner every step of the way. You may have heard about home equity loans and lines of credit, but you may have thought you can’t use it for small remodeling projects. However, it’s actually one of the most common uses for those accounts.

Let’s talk. You supply the ideas, Destinations can supply the home equity loan or line of credit to make your dreams a reality. Call 410-663-2500 and speak with a loan officer and start enjoying the equity in your home today.

Are HELOCs A Good Idea These Days?

/ destinationscreditunion / Leave a comment


Debt is the wealth killer. You’ve heard this piece of advice repeated in a million different corners of financial news. You’ve read articles telling you to get rid of all your debt in order to build wealth and save for the future.

There’s one very notable exception, though, and you’re living in it. Debt secured by your home has low interest rates, and regular payments can do wonders to improve your credit score. In many cases, too, you can get preferential tax treatment to the interest you pay.

 Money you owe on your home is often called “good debt” and there are a few ways in which it’s different than other kinds of debt. First, it’s secured. That is, your ability to repay the debt is ensured by the value of the property. Second, its effective interest rate is lower even than advertised. Your home will likely appreciate in value. The value of appreciation of real estate has been 6.4% on average nationwide. So, instead of losing you money, your mortgage just decreases your investment income. Third, creditors take the presence of installment loans, like mortgages, as signs of responsible use of credit, not to mention the consistent repayment history looks very favorable to potential lenders and credit scoring entities.

If you’ve already paid for your house, there are still ways you can reap the benefits of getting this “good debt.” You can use what’s called a home equity line of credit, or HELOC, to pay for a variety of expenses. There are a few key differences between a HELOC and your mortgage.

First, HELOC rates are far more stable. Between 2010 and 2014, home equity loans had an interest rate that fluctuated by more than 2%, while HELOC rates changed by less than .5%. Second, HELOC loans generally offer lower interest rates from the start. Because they’re secured by the equity you already have in your home instead of the possible resale value of your home, lenders need to charge less interest to secure the value of the loan.

Because of these benefits, HELOC loans are on the rise. More than 200,000 people took out HELOC loans in the last quarter, up 9% from last year. More people are borrowing more, too. The average HELOC limit in March was just over $100,000.

Bear in mind, HELOC loans are not risk-free. You’re securing your purchases with your home. If you don’t pay your loans, you can face very serious consequences. You can lose your house, seriously damage your credit, and still be liable for the balance of the loan. Like all debt, HELOC loans are serious financial instruments. You should have a good reason for using it and a plan for paying it off.

If you’re interested in getting a HELOC, Destinations Credit Union can help. Let’s take a look at a few ways our members are using their HELOC to improve their lives and financial well-being:

  • Financing home improvement. This is the most common reason given for using a HELOC. It makes sense. Improvements to your home increase its value, so home improvements are like a low-risk investment. Using the equity that’s in your home to finance these improvements is the cheapest way to increase the value of your holding.
  • Debt Consolidation. If you have a lot of “bad” debt, like credit cards, car payments, or other high-interest loans, you can save a lot of money each month by paying off that debt with a HELOC. Your HELOC will have a lower rate of interest and you’ll only have to make one payment each month. Plus, you may be able to take advantage of preferential tax treatment for the interest (consult your tax advisor for details).  But, beware of running up a lot of bad debt once again – you’ll be in worse shape if you do that!
  • Purchasing a car. Unlike your home, your car is certainly going to depreciate in value. If you buy a used car then resell it immediately, you will almost certainly lose money on that transaction. This depreciation means the interest rates on auto loans will be higher than those on your HELOC. You can also get a lower price overall by buying the car outright.
  • Major purchases. For most people, the biggest source of wealth is their home. A home loan is one of the few monthly bills that actually builds wealth instead of zapping it. If you need to make a major purchase, the biggest source of capital you’re likely to have is your house. If you want to start a business, purchase a boat or an RV, or buy rental property, a HELOC is one of the best ways to finance it.
  • Covering emergency expenses. Most financial experts recommend keeping an emergency fund that could cover you for between 6 months and 1 year if you lost your job. That’s good advice. If you don’t have the cash on hand, though, you can open a HELOC to cover medical expenses, car repairs, and other unexpected costs. You should still work to build savings that can prevent borrowing in the event of a catastrophe. Opening a HELOC can provide you some security in the mean time.

If you own your home and are considering any of the above plans for your future, you should call or stop by to speak to a representative from Destinations Credit Union today. The friendly and knowledgeable staff can answer any questions you might have about what a HELOC is and how you can use one. They can even get started with the paperwork so the credit is there when you need it. Don’t wait until you’ve got a giant bill for remodeling or an expense you can’t cover; speak to a representative about HELOC loans today!

SOURCES:

 http://homeguides.sfgate.com/benefits-home-equity-line-credit-9182.html