home equity loans Archives - Common Trust FCU

Tips for Making & Sticking to Resolutions

When the new year ball drops, it is the perfect time to turn a new page. The new year can be exciting, yielding opportunities to restart with a clean slate for fresh goals. Personal and fiscal reflection helps you assess where you stand in your shoes to set your resolutions in motion. As you begin to draft your resolutions list, the Common Trust team is offering some tips to kick off a great 2022 and keep you on track to stick to your resolutions.

Limit Your Resolutions List

Typically, humans tend to be harder on ourselves than we need to be. You might have a long list of resolutions, but be kind to yourself and focus on only a few so you do not overwhelm yourself. Self-care is important in reflection, so be sure to cut yourself some slack. Consider starting with a small, actionable goal so you can get into the goal-achieving mode.

Choose a Specific Goal

Many people often set lofty resolutions at the turn of the new year, and this practice makes some bite off more than they can chew. However, it also presents great opportunities to grow and overcome any struggles with sticking to goals.  Setting your mind on one specific, realistic goal helps craft a concrete plan to achieve that goal. For example, if your goal is to exercise more, create an actionable plan and create daily calendar reminders to go for a walk or go to the gym.  Achieving a small goal boosts your self-esteem and helps you tackle things more easily.  If you have a big goal, consider breaking it into manageable pieces and take one thing at a time.

Change up your Resolutions

If you find yourself stuck on one resolution year after year, chances are you have it in your mind you cannot stick to that goal and may mean that you will likely abandon it. So if your resolution in years past was to lose weight, for example, change it to something like just eating more vegetables per week to retrain your mind to embrace a different version of your goal. 

Plan, Plan, Plan

Whatever your goal might be, you need to plan to achieve it – just the thought of an idea won’t be enough. Creating a detailed plan and even using your phone for reminders, tracking progress, etc. will help you manage how you will achieve your goal. Working on a goal without a plan creates a higher risk of giving up if an obstacle arises.

The Buddy System

More often than not, a goal with a friend or family member means you’ll be even more motivated to achieve that goal. Connect with a friend or loved one to see if you both share the same goals and create a method to keep one another accountable. If you make it fun or like a game, you may even find yourself enjoying motivating the other, which means you’ll be more likely to adhere to the plan.

Set One Financial Resolution 

We recommend making one small economic goal that improves your financial well-being when creating your list. Even making one adjustment to your finances means you can put money towards something that makes you feel good– like travel or giving to a charity. Pennies turn into pounds quickly, you will find, and making a financial modification will help you allocate money towards something you love. 

When challenging yourself to change the tides, remember that taking on too much is usually the very reason New Year’s resolutions can fail. Be kind to yourself and create realistic steps to get into the right mindset to create the change you seek. 

As always, Common Trust is available to help you with any of your own personal financial goals. Happy New Year, and we look forward to helping you make 2022 your brightest year yet.

4 Smart Ways to Use a Home Equity Loan

As home prices continue to rise, homeowners are sitting on a growing amount of equity in their homes and an increasing source for extra cash. While tapping into that cash to fund an expensive lifestyle might be tempting, using your home’s equity should be done cautiously and with a specific reason in mind. Continue reading for four of the smart ways that you can safely use a home equity loan to improve your financial future.

Home improvements

Home renovations are one of the most frequent uses of home equity loans and are also typically one of the smartest options. Home improvements are a great decision because if done right, they raise your home’s value and make for a great investment. If you decide to use a home equity loan for this, focus on improvements that will increase the home’s value but also will improve its functionality or make it a more enjoyable living space for you.

If you’re planning on selling your home soon, make sure that you are spending on upgrades that shoppers are looking for so you can make back as much of your investment as possible. It’s best to focus on upgrades such as fresh paint, new flooring, or bathroom and kitchen updates, which are features that buyers frequently look for.

Consolidate high-interest debt

Another smart way to use a home equity loan is to consolidate debt. If you are currently making payments on multiple high-interest credit cards or loans, taking out one home equity loan to consolidate these expenses offers numerous benefits. One benefit is that by consolidating your debt into one payment, you have the potential to save thousands of dollars on interest. Consolidating with a home equity loan also gives you the freedom of making just one payment per month, rather than coordinating multiple monthly payments. Lastly, home equity loans have a designated loan term, so you will know exactly when the debt will end, in comparison to revolving credit card debt.

Investment properties

Using a home equity loan to fund an investment property is another smart option if done properly. If you have built enough equity in your home you may be able to use a loan to pay for a downpayment or even for the full cost of an investment property. However, when purchasing a second property, you should have the intent of receiving a return on your investment by either renting or reselling it.  While it might be tempting to use a home equity loan to purchase a vacation home for your family, avoid spending it on something that will not offer the opportunity to improve your financial future.

Emergency expenses

If you are faced with expenses from an emergency situation, tapping into your home’s equity might be the right solution for you. Whether you are faced with a medical emergency or job loss, paying for your expenses with a home equity loan is a smart option, especially if you do not have an emergency savings fund prepared. Even though you will not be using the loan to better your financial future, when life hands you an unexpected situation, taking advantage of your home’s equity can provide you with the necessary funds.

Now that you know the smart ways to use a home equity loan, if it’s the right choice for you, get started with CTFCU. From now until the end of March, CTFCU’s home equity loan promotion is offering rates as low as 4.99% with terms at 10 years. Visit our promotions page or stop by our office to learn more.

The Dos and Don’ts of Home Equity Loans

Today, American homeowners have $5.5 trillion in home equity available, up more than $3 trillion since 2012. While Americans chose to tap into their home’s equity for a variety of reasons, there are certain situations where it should be avoided.  Continue reading to learn more about the dos and don’ts of using a home equity loan.

Do: Make home improvements

One of the best uses for a home equity loan is to fund home improvements that will increase your home’s overall value.  Renovation projects such as building an addition onto your home, updating your kitchen or putting on a new roof increase your home’s worth and offer a great return on your investment.

Don’t: Take Out More Than You Need

Even if you have the equity available, make sure to take out a home equity loan only for the amount that you need. What you take out should be used for a specific reason, rather than used as additional cash for non-essential items. When you increase your loan amount for some extra spending money, you’ll end up paying much more over time on the cost of interest. You also run the risk of losing equity in your home if the housing market declines.

Do: Consolidate your debt

Another great way to use your home equity loan is to consolidate debt from multiple high-interest credit cards. Restructuring your debt from many cards into one low-interest loan has the potential to save you thousands of dollars on interest. It also simplifies your monthly payments to help make life easier for you. Just don’t forget to be disciplined with repaying the home equity loan so you don’t end up back in a cycle of dangerous debt.

Don’t: Purchase luxury items

If you plan to take out a home equity loan, avoid using it to fund luxury items such as expensive cars, boats, vacations or electronics. Borrowing to pay for expensive, non-essential items is not a safe choice. Since your home is used as collateral for a home equity loan, if your property value declines or if you become unable to repay the loan, you put your house at risk. Although it’s tempting, remember that vacations or expensive cars are not worth the risk of losing your home.

Do: Cover unexpected emergencies

When unexpected emergencies occur, a home equity loan is a good option for covering the expenses. If you don’t already have an emergency savings account prepared, a home equity loan can cover the costs of an unexpected situation that you were not financially prepared for. These types of situations include a medical emergency, job loss or extreme weather event.

Don’t: Use it for paying monthly bills

Lastly, avoid using a home equity loan to cover monthly expenses such as your car or phone payments. Since monthly bills do not offer any return on your investment, it’s a smart choice to avoid using a loan to cover them. Instead, these payments should be factored into your monthly budget. Remember, treating your home like it is an ATM is a dangerous decision.

Now that you know more about the dos and don’ts of home equity loans, if taking out a home equity loan is the right choice for you, CTFCU is here to help. From now until March 31st, we are offering home equity loans with rates as low as 4.99% and terms at 10 years. Visit our home equity loan promotion page to learn more or visit the branch to get started!

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