House and Money with Pad and Pen

House and Money with Pad of Paper and Pen

You need money, just as surely as the sun rises. And sometimes you need it quickly.

Maybe your laptop crashes or you discovered an under-the-floor leak in the master bathroom. Maybe you incurred some medical debt. Whatever the reason, a home equity loan could be an option for offsetting those big bills in a hurry.

Home equity—sometimes called a second mortgage—is basically leveraging the value of your home to fund a low-risk financial need, such as replacing the bathroom plumbing or even paying your child’s college tuition.

“Borrowing against home equity gives you cash on hand to pay for things that matter, whether it’s a planned home remodel or an emergency need,” Member One Federal Credit Union says.

However, some lenders have limitations to borrowing, with most limiting it to 80 percent of your cumulative loan-to-value, according to BankRate.com. Another limitation by some lenders is closing costs on a home equity loan. It’s common to pay up to 5% of the loan in closing costs, according to LendingTree.com. That would be $4,000 on an $80,000 loan.

Fortunately, there are local options that can give you the financial flexibility you need, such as Member One FCU’s limited-time home equity loan, with special low rates and no closing costs.

Homeowners in central and southwest Virginia are allowed to borrow up to 100% of their home’s value. If you need money all at once in a lump sum, you should apply for a home equity loan. If you need the money spread out over time, you should consider a home equity line of credit. This is a flexible solution that works like a credit card: you borrow money when you need it, and you pay back only on what you’ve borrowed.

Another precaution is to carefully weigh what you’re using the home equity loan for. It’s not recommended to use a home equity loan for a risky financial purpose, such as funding a new business. This is because your home is collateral for the loan, so you need to follow a strict repayment plan that allows for minor emergencies.

You also need to allow yourself time—anywhere from 30 to 45 days for the loan to land in your account.

With low lending rates and no closing costs, Member One FCU can help you access emergency cash at a good rate and keep more of your own money in your pocket.

To see if this is right for you, you can apply online for a fixed rate home equity loan or a home equity line of credit. For more information, call Member One FCU at 800-666-8811, visit memberonefcu.com, or go to any of the retail centers in Roanoke Valley, Lynchburg, New River Valley, and Franklin County.