If you are planning a home improvement project this spring or looking for a good way to consolidate your high-interest debt, you may be thinking about borrowing against the equity in your home. While that can be a great way to get the money you need, knowing a little about the available options can help you avoid ending up with the wrong loan.
Why would you borrow against your home’s equity?
There are a few common reasons to get a home equity loan:
To Consolidate High-Interest Credit Card Debt
Interest rates on a home equity loan or line of credit are typically much lower than rates on a credit card and because the payment term on equity loans are typically longer, you can lower your total monthly payment, which can provide breathing room in your monthly budget.
For example, let’s say you have $30,000 in credit card debt at an interest rate of 14.99%. If you made just the minimum payments on this card of $600, or 2% of the balance, it would take you 44 years to pay off the balance in full and you’d end up paying $48,826 in interest.
What if you had equity in your home and instead took out a $30,000 loan? We’ll use 2.99% interest, SMCU’s currently discounted home equity rate, and we’ll assume a 5-year repayment period. Under this scenario, you’d make 60 monthly payments of $538.93 and pay just $2,336 in interest over the life of the loan – a savings of $46,490 – and pay off your debt nearly (more…)
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The average American family overspends on their wireless services by an average of $200 a year. If this sounds like you, it might be time to start saving with the Sprint Credit Union Member Discount. To take advantage of these Sprint savings, remember to verify your credit union membership. (Details below.) You or your business… (keep reading)
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We love to hear from you! Seattle Metropolitan Credit Union is a democratically run financial cooperative, owned and controlled by our members. Your feedback is vital in determining how we can better meet your needs and continually improve our products and services. Now is your chance to let your VOICE be heard with an important… (keep reading)