Manage Student Loans to Avoid Trouble

One of five U.S. households has student-loan debt, with the biggest burden falling on the young and poor, according to USAToday.com. The economic downturn adds to debt among recent college grads, who often don’t find full-time jobs after graduation. The lack of a consistent paycheck goes hand in hand with the inability to pay back loans.

Follow this advice from Credit Abuse Resistance Education, Alexandria, Va., to help manage student loans:

Know loan details. Know how much you owe on all student loans, as well as the interest rates, monthly payments, and when the loans need to be paid off.

Stay in touch with your lender. Let your lender know of any contact changes such as a new address, email, phone number, or name change as soon as possible.

Know grace periods. After finishing school, you have a grace period before you must start making payments. Grace periods vary from loan to loan. Stay on top of this detail to avoid fees.

Be conscious of loans while in school. If possible, try to pay down student-loan debt while you’re still in school. You won’t have such a big chunk to pay after graduation.

Consider consolidation. Consider consolidating student loans to help manage payments. This could save you a lot of money in the long run, but be certain you can handle the combined payment before you consolidate.

Ask at Hopewell Federal Credit Union for advice about managing your existing student loans. Our professionals can offer guidance for your situation. Stop by or call us today at 740.522.8311.

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Home Equity Loans Give You Room For Improvement

It’s a tough choice for a homeowner: Move into a new house, or improve the one you have. It seems so easy to call a realtor and arrange a showing. But your current home has something no new home can offer–equity.

Home equity is on the rise, providing homeowners a ready financing source to turn home sweet home into home sweet dream home. On average, homeowners spend 18 months planning home improvements. It’s time well spent; some renovations pay off better than others. Bathroom and kitchen renovations provide the greatest return, between 90% and 95%. Decks and home offices hold the low end, between 65% and 70%.

As you plan, look beyond your house to your neighborhood. Will renovations put you in a different league–and price range–than your neighbors? Also, keep in mind how long you’ll be in your house. If you’re going to fix it up and sell in six months, you’ll get all the pain of remodeling and not much gain. But if you plan to live in the house more than three years, it makes economic sense to remodel.

How do you calculate your available equity? First step: Say you made a down payment of $20,000 on a house priced at $100,000 five years ago. Since then, you’ve paid $15,000 toward the principal, and the market value of your house has increased to $115,000. The sum of your down payment ($20,000), principal paid ($15,000), and the increase in property value ($15,000) gives you $50,000 in equity.

Second step: Ideally, what you owe on your home–mortgage plus home equity loan–shouldn’t exceed 80% of your home’s value. So 80% of $115,000 suggests, if you meet other lending yardsticks, you may be eligible for as much as a $27,000 home equity loan (house is worth $115,000; 80% of that is $92,000; you still owe $65,000 on the first mortgage; so $92,000 – $65,000 = $27,000).

Call Hopewell Federal Credit Union to discuss your home equity loan options today.