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    Home Improvement Loans: What Are My Options?

    Last updated 3 days ago

    Whether your home improvement plans are large, small, short-term, or ongoing, Amplify Credit Union offers several home improvement loan options to suit your needs, even if you don’t have available equity in your home.

    If you recently purchased your home and are looking to make improvements, Amplify’s Homeowners Express Loan or Line of Credit may be a great fit for you. With no equity or lien requirements, these personal loans for homeowners offer low, fixed rates and the flexibility you need for your home improvement projects.

    If you have available equity in your home, or if you are looking to combine your mortgage balance with your home improvement costs, a Home Equity Loan or Home Equity Line of Credit will offer you even lower rates and longer terms. Equity Loans take longer to fund than Express Loans, so you may want to consider using an Express Loan as a bridge loan until your Equity Loan funds.

    Homeowner Express Loan

    IDEAL USES: Simple, one-time projects that require full payment up front, or even consolidating existing loan balances.

    • Installment Loan – funds available as lump sum
    • Available in terms of 5 years, 7 years, or 10 years
    • Same monthly payment for life of the loan
    • Fixed rate starting at 6.99% APR
    • Fast funding – within 48 hours!
    • No liens or home equity required
    • No closing costs

    Homeowner Express Line of Credit

    IDEAL USES: Ongoing projects that occur in various or unpredictable stages, or even unanticipated projects and repairs.

    • Line of Credit – revolving balance, just like a credit card
    • Borrow from it again even after you’ve paid it off
    • Monthly payments depend upon your balance and may change as you borrow more
    • Fixed rate starting at 7.99% APR
    • Fast funding – within 48 hours!
    • No liens or home equity required
    • No closing costs

    Home Equity Loan

    IDEAL USES: Larger, one-time projects such as add-ons, roofing or foundation repairs, and complete renovations, or even consolidating existing balances with your mortgage to get a lower rate post-completion.

    • Installment Loan – funds available as lump sum
    • Available in terms of 5 years, 10 years, 15 years, or 20 years
    • Same monthly payment for life of the loan
    • Lowest fixed rates available, starting as low as 3.49% APR
    • Funds available 3 days after closing (entire process takes approximately 3-4 weeks)
    • Equity in your home is required, and a lien will be placed on the home (just like a mortgage)
    • Interest paid may be tax-deductible. Check with a tax professional about your specific circumstances.

    Home Equity Line of Credit

    IDEAL USES: Ongoing projects of substantial size or cost that occur in various or unpredictable stages, such as energy efficiency upgrades, new HVAC, or house rewiring.

    • Line of Credit – revolving balance, just like a credit card
    • Borrow from it again even after you’ve paid it off (minimum withdrawal amount is $4,000)
    • Monthly payments depend upon your balance and may change as you borrow more
    • Low, variable rate starting as low as 3.69% APR
    • Funds available 3 days after closing (entire process takes approximately 3-4 weeks)
    • Equity in your home is required, and a lien will be placed on the home (just like a mortgage)
    • Interest paid may be tax-deductible. Check with a tax professional about your specific circumstances.

     

    5 Things You Probably Didn't Know About Your Credit Score

    Last updated 4 months ago

    Here are some nifty facts about credit scores you probably didn't know -- and if you did, you should be working here!

    1. Your credit score is a calculation that indicates to a lender how likely you are to become 90 days past due on a debt within the next 24 months. Most people think it simply reflects how likely you are to repay a debt, which is true, but the algorithm more heavily considers monthly payment history than number of loans you’ve successfully paid off.
    2. Your utility bills, rent, cell phone bills, insurance payments, and income are NOT reported to the credit bureaus. However, if any of your bills end up with a collection agency, they WILL be reported.
    3. There are three main credit bureaus that each report three different credit scores. Your scores can vary depending on what information is reported to each of the bureaus. Different lenders report to different bureaus, so don’t just assume a lender is going to decision your loan based on the highest of your three scores.
    4. Your “FICO®” score is actually a blend of the scores from the three bureaus. Some lenders take this score as your credit score, but others may only consider your score from one or more of the bureaus. Amplify and many other Texas lenders use Equifax credit reports to decision loans.
    5. As of fall 2014, your FICO® score no longer takes medical collections into account. Medical collections will still show up on your credit report, but they will no longer affect your FICO® score.

    Credit Basics: What is LTV?

    Last updated 5 months ago

    When applying for a collateralized loan such as a car loan or mortgage, you may hear the term “LTV” thrown around along with a bunch of other acronyms. But what is LTV?

    LTV stands for “Loan-to-Value” and is a ratio expressed as a percentage. It is calculated by dividing the amount you’re borrowing by the value of the collateral being financed. For example, if you’re financing a car for $25,000 but the NADA value is $21,000, your LTV would be 119%.

    25,000 divided by 21,000 = 1.19, or 119%

    The lower your LTV, the better equity position you, the borrower, are in. In order to not be upside down on your loan, the goal is to owe as little as possible as compared to the value of the collateral. If you’re financing more than 100% LTV on a vehicle, consider purchasing GAP Insurance to protect yourself in the event your car is totaled. If your vehicle is declared a total loss and your LTV is more than 100%, you may owe money out of pocket since your insurance company will only pay out up to 100% of the value.

    When considering Auto Loan Financing, Amplify uses the NADA “Clean Trade” value to determine the LTV. Other lenders may use Kelley Blue Book, Edmunds, or other NADA values. Every lender is different, so consider that factor when doing your research.

    When financing a Mortgage, lenders will usually consider an appraised value when processing the loan. Depending on the amount you’re borrowing, a lender may require multiple appraisals from different appraisers to determine the value; others may simply use the county’s tax appraisal value. Again, every lender and loan situation is different, so ask your lender what their process is.

    Applying for Credit: What is DTI?

    Last updated 5 months ago

    DTI stands for “Debt-to-income,” and it is one of the key items a lender reviews when underwriting a loan request.  DTI is also known as the debt ratio and is usually expressed as a percentage. It indicates to a lender how much of your total income is obligated to the debts on your credit report. In other words, your DTI tells a lender whether or not you can afford the loan.

    DTI is calculated by dividing your total monthly debt payments by your monthly gross income (before taxes). Debts to include are housing payments (mortgage or rent), car payments, student loans, alimony, maintenance, child support, credit card minimum payments, and line-of-credit minimum payments. The calculation does not typically include utility bills, insurance payments, and day-to-day expenses like gas and groceries.

    So for example, if your DTI is 40%, that means that 40% of your income is obligated to debts on your credit report such as housing, car payments, and other loans.

    A healthy DTI for someone with monthly rent or mortgage payments does not exceed 45%.

    Financing a Vehicle for your Business

    Last updated 6 months ago

    When you own a business and you need to purchase an auto, you have a couple of different options.  You can purchase the auto with funds from your business or you can finance it.

    Consider the choice carefully.  If you have the capital to absorb the cost of the auto without significantly affecting your finances, that can be a good option to avoid interest charges and a monthly payment.

    If your business has a line of credit with a financial institution then you could use it to purchase the vehicle.  Hopefully you have secured a good interest rate if that is the route you choose.

    Interest rates for auto loans are typically lower than unsecured or revolving credit, so you may want to instead consider financing an auto loan under your business name.  Depending on the amount, you may be able to be approved based on your personal credit rating.  If that is possible then the process mirrors a normal auto loan application.

    Many financial institutions have a business lending department for such requests.  It can be a way to strengthen your relationship with an existing institution.  It can also be a way of establishing a relationship.

    So what is the financial institution going to look at when they review this type or loan application? 

    That really depends on their internal guidelines, but here are some items that will likely come into play:

    1. The income or cash flow of the business.  This is normally expressed through the tax returns that your business has filed.  It is important that you are reporting your true income on the tax returns because most institutions will only use what can be verified through the tax returns, and in many scenarios they will require two or more years of filed returns.
    2. The value of the auto vs. the amount you request.  This is often referred to as the Loan-To-Value ratio or LTV.  When reviewing the request it is not unusual for an approval to be limited to 100% or less of the value of the auto.  The reason for this is because the vehicle will likely experience more wear and tear than a standard consumer auto.  Likewise it may have after-market add-ons which are necessary for the business but also significantly impact the value of that auto moving forward. 
    3. Your relationship with the financial institution.  While this certainly has less impact than the first two, it may be an important deciding factor if the request is marginal.  If the business has an active account with the financial institution then they likely will be able to understand on a much deeper level the profitability and cash flow of the business.  This can be a great advantage to you when submitting a business auto request.
    4. The type of vehicle you’re looking to purchase.  Amplify can finance up to 80% of the value of the vehicle if it is truly a commercial-purpose vehicle, such as a bus, cargo van, or semi-truck. If the vehicle is purchased at a normal car dealership and is a consumer-purpose vehicle (purchased under the business name), Amplify can finance up to 100% of the value. Every institution is different, so check with your lender.

    It is a good idea to contact your tax accountant to determine the advantages/disadvantages to titling the auto under the business name.  This is an important purchase, and you will be helping yourself tremendously by doing the appropriate amount of research so that you can make a sound decision for your business needs.

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