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Products
| Loans | Home Equity Loans and Lines of
Credit
Put your home to work with a home equity loan.
Home improvements, bill consolidation, educational expenses...
No matter what you're paying for, a home equity loan can provide
the funds you need. Since your home is used as collateral, the interest
rate on a home equity loan is lower than for other types of loans.
Plus, the interest you pay may be tax deductible*, making
a home equity loan an even smarter choice. Columbus Metro currently
offers home equity loans to homeowners residing anywhere in the
state of Ohio.
Columbus Metro offers two types of home equity loans: our Redi-Line
home equity line of credit and fixed-rate home
equity loans.
Redi-Line Home Equity Line of Credit
A home equity line of credit, or HELOC, is a revolving line of
credit for which your home serves as collateral. You'll be approved
for a specific amount of credit, or credit limit, which is the maximum
amount you may borrow at any one time. You access your credit line
as needed using our special Redi-Line Visa or handy convenience
checks. As you make payments towards the principal, those funds
become available for your use once again.
HELOCs are particularly convenient if your need for funds is ongoing.
For example, you may be paying for a child's college education or
making a variety of home improvements. Redi-Line allows you to borrow
what you need at any given time, repay it, and then borrow again
as needed. With a Redi-Line home equity line of credit, you can
borrow up to 80% of your home equity. What's
more, there are no application fees, no closing costs and
no annual fees associated with our home equity line of credit.
Fixed-Rate Home Equity Loans
A home equity loan is simply a closed-end or installment loan.
In other words, you borrow a specific amount and agree to pay it
back over a specified period of time. Home equity loans are usually
used for a one-time purpose such as purchasing a new car or consolidating
bills. Columbus Metro offers fixed-rate home equity loans with terms
of 180 months, and you can borrow up to 80% of the equity
in your home.
As an alternative to traditional fixed-rate home equity loans,
Columbus Metro also offers an IDEAL (Interest Deductible Equity
Account Loan) loan. An IDEAL loan costs less and can be more flexible
than a traditional home equity loan, but still gives you the option
of using your home equity to secure a tax deduction.* Here's how
it works:
Joe and Carol Member own a home with a fair market value
of $100,000 and a mortgage balance of $75,000. Carol decides
to purchase a $25,000 new car with a vehicle loan from the
credit union, and chooses the IDEAL Loan option. As collateral
for the loan, the credit union will hold both the new car's
title and the mortgage deed to their $100,000 home. By using
the Members' home as additional collateral, the IDEAL Loan
allows Carol to deduct the interest she pays on the loan from
her federal income taxes.*
With an IDEAL loan:
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No application fee is required
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No appraisal is necessary
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Just $100 covers verification of property ownership, flood
certification, preparation of the mortgage, and filing and release
fees
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The mortgage can be released** at any time if you find it necessary.
(You would, however, relinquish any tax deductibility for the
rest of the loan).
If you are interested in an IDEAL loan, please contact
us for more information.
* See your tax advisor for deduction eligibility.
** Pending credit union approval.
Calculating your home equity
Home equity is simply the difference between the fair market value
(appraised value) of your home and your outstanding mortgage balance.
For example, if your home is worth $150,000 and you still owe $65,000
on your mortgage, you have $85,000 in equity.
Columbus Metro allows you to borrow up to 80% of your home equity,
or $55,000 in our example. The chart below demonstrates how we arrived
at this figure:
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How Much Can I Borrow?
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| Value of Home |
$150,000
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| 80% of Appraised Value |
$120,000
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| Less Mortgage Balance |
$65,000
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| Potential Loan Amount/Credit Line |
$55,000
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If you have any questions or would like more information about
Columbus Metro's home equity loans or lines of credit, please stop
in any of our offices, call us at (614)
239-0210 or (800) 986-3876, or e-mail
us today.
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©
2001 Columbus Metro Federal Credit Union
