Ask the Expert with Your Community Credit Union

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Central Virginia Federal Credit Union

In today’s market, should I buy or renovate my existing home?
Many homeowners today are making the wise decision to update and renovate their homes instead of buying due to higher rates and home prices. A home equity loan or line of credit can help make this process easier! Our experienced team at Your Community Credit Union can help you decide which one is the right option for you.

What is a Home Equity Loan and how does it work?
A Home Equity Loan is based on the equity (value minus the amount you owe) available in your home. You can choose a fixed loan amount with the benefit of knowing your payment amount and how long you will be making payments. If you are borrowing for a large remodeling project, major purchase (such as a vehicle), vacation, wedding or other one time expense, this may be the best option for you. Many people will also choose to consolidate higher-rate loans or credit cards with a home equity loan.
We recommend you figure out how much you need for the project or expense upfront. Then the CVFCU lending staff can help you calculate the value of your home’s equity. We can also assist in making sure you can afford this second mortgage payment in addition to your first mortgage payment and other monthly expenses. The funds from a Home Equity Loan are available all at once. When you repay a Home Equity Loan, you’re all set! You can choose to borrow again for future projects as the need arises.

How is a HELOC different from a Home Equity Loan?
If you want an option that flexes with your needs, a Home Equity Line of Credit (HELOC) works similarly to a credit card but typically has a lower interest rate because it is secured by your home’s equity. The credit limit is determined by your home’s equity. As you make payments, your balance decreases so you can use your credit again and again. For example: You have a $25,000 line of credit and borrow $10,000. Several months later you pay back $5,000. You now have $20,000 available without having to apply for a new loan. Funds can be easily accessed through checks, using online and mobile banking options or in person at CVFCU branches. This is a good option for smaller projects or expenses that come up on a regular basis.
Things to Keep in Mind. A HELOC is a variable rate and will go up and down over time so it is important to monitor it regularly to know how much interest you are paying. The minimum monthly payment usually covers just the interest on the balance. Because you may not be required to pay principal, a HELOC allows you maximum flexibility each month.

Which one is better when?
Consider how much money you really need and how you plan to use it. Be sure to look at factors like interest rates, fees, monthly payments and tax advantages as you weigh your options. Home equity interest payments may be tax-deductible so be sure to consult your financial advisor. Rates will vary depending on your credit score, existing debt and the amount you wish to borrow. The specialist you work with at CVFCU will help you make comparisons to find the one that is best for your situation!

How do I get started?
Contact Your Community Credit Union to speak with a home loan expert to discuss all your options and how to start the loan process so you can get your project started!

About Your Community Credit Union: Central Virginia FCU

Your Community Credit Union is proud to be your lifelong financial partner. From your first savings account to your first home to the first day celebrating your retirement, they are proud to partner with you. Your Community Credit Union goes beyond savings and checking accounts, they are here to empower you to financial wellness and celebrate every milestone with you!
Consumer education is a hallmark of CVFCU’s service to members and the community. Their ultimate goal is to improve quality of life through financial education. Central Virginia FCU is also committed to giving back to our community – because, as a local financial institution, it’s their community, too!

From small projects to large events, CVFCU is passionate about helping their neighbors. Each year efforts are focused on local charities and events including Children’s Miracle Network, The Humane Society, Teddy Bear Brigade, The Salvation Army, and others.

As a full service not-for-profit financial institution, they offer a variety of reward checking and savings accounts as well as auto, home, and personal loans. Their experienced mortgage staff can help you find the new home of your dreams or renovate your existing home with a home equity loan or line of credit to fit your budget. Visit one of Your Community Credit Union’s five branch locations or phone the locally staffed Call Center to connect with a financial services expert today.

434/528-9016 | 800/335-0069
Mt. Athos Road
Old Forest Road
Timberlake Road
Madison Heights Seminole Plaza
Forest Cavalier Corner

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