22 Jul

Benefits of an Interest-Only HELOC

Interest-only heloc

A home equity line of credit can be a great tool for homeowners. And an Interest-Only HELOC allows for even more flexibility with your money and lower monthly payments.

This loan product gives you an allotted amount you can spend with a set amount of time to spend it. Essentially borrowing money against the equity built up in your home, with the interest being the minimum monthly payment.

In order to make the most of an Interest-Only HELOC, it’s important that homeowners understand what it is and how to utilize it to its full potential.

Access to More Cash

Home equity line of credit is comprised of two phases, a draw period and a repayment period. They’re pretty self-explanatory.

  • During the draw period, you’re able to access money from your line of credit to make monthly payments. Those payments go toward the interest you owe. In the long run, this adds flexibility.
  • Then, during the repayment period, you pay back the remaining interest and principal.

When you only have to make payments toward the interest, not the principal, the result is extremely low monthly payments.

Low Interest Rates

Interest-Only HELOCs are one of the most affordable and flexible ways to borrow money. The lower your HELOC interest rate is, the lower your monthly payments, so make sure your bank offers competitive rates. An Interest-Only HELOC has the monthly payment as the interest accrued, so that means even lower payments!

For example, RMLEFCU offers interest only HELOCs with rates starting as low as prime +1% APR.

Unlike a loan, a home equity line of credit is readily available whenever you need it. You apply for the line once, then draw on it as you need it. Remember, as the principal is repaid, funds immediately become available for use again.

Flexible Payments

In an Interest-Only HELOC, you only pay the monthly interest rate during the draw period, so you can manage your budget around those expectations.

Additionally, you can choose to pay back just the interest cost or make additional payments toward the principal. The freedom to choose your pay back amount can alter based on your available budget and income.

How to Know if an Interest-Only HELOC is Right for You

Most people choose an Interest-Only HELOC when attempting to conserve monthly income in the short run. However, there are other times when this option is beneficial:

  1. When you’re juggling fluctuating income and need flexible payment options
  2. If you plan on selling your home after renovations
  3. If you need to consolidate debt
  4. When you need a large sum of cash for an investment
  5. If you’re trying to minimize monthly payments during a flip
  6. If you’re making a down payment on a second home before selling your first

Call us today to discuss our low HELOC rates and put your home’s equity to great use! (303) 458-6660

05 Apr

 The Advantages and Benefits of Credit Cards

Credit Card

While credit cards and debit cards may seem quite similar, they are actually very different when it comes to how they are used. A debit card is directly linked to a checking account or money market and transactions are taken from the available balance in that account. Credit cards, on the other hand, are not linked to a checking account and there is no balance due immediately after a transaction. Instead, it works with monthly payments.

Credit cards often get a bad reputation, because of the delayed balance due and temptation surrounding that, but the truth is they can be very advantageous to your finances! Credit cards are a great tool for earning rewards, traveling, building credit, and handling emergencies or unplanned expenses. And, if you use them correctly, these advantages can even earn you money!

Benefits of Using a Credit Card

Let’s talk about the biggest benefit. Building your credit. A credit card is a line of credit and paying it off in full every statement can help you build your credit.

Along with that, when used responsibly, they can be beneficial when traveling. Major hotels and car rentals often require a hold on a credit or debit card. If you don’t currently have the funds in your account for the deposit/hold, it’s great to use a credit card for the time being.

You can also earn rewards on your card for purchases you make. These rewards can be in forms of cash back, discounts, or even travel miles! For those who use their cards regularly, a rewards card might be the best option for you so you can earn those extra points and redeem them for rewards!

How Do I Use Credit Cards Responsibly?

Treating your credit card as a debit card is a top priority. You should never spend more than what you can pay back. It’s essential for anyone who decides to open a line of credit to consider how they plan to make the payments and how to use their new purchasing power responsibly.

Credit cards also offer balance transfer options. These options allow a cardholder to transfer the balance on one or multiple credit cards to another card. The transferred balance is now subject to the interest rate and terms of the new card. Be sure to read the terms and conditions of you are to utilize the balance transfer option!

Which Card Should I Apply For?

There are credit cards options for every kind of spender. Some are specifically tailored for people trying to build up their credit, usually with a deposit attached to the card. There are some cards with low-interest rates for users who want to keep money on their card and there’s also rewards cards that offer enticing rewards in exchange for spending.

RMLEFCU offers three credit card options for our members. The Classic Visa, the Platinum Visa Select, and the Platinum Visa.

These three cards all have the following benefits:

  • Accepted worldwide
  • No fee for cash advances or balance transfer
  • Competitive rates with no annual fees
  • 25-day grace period to pay for purchases
  • Make payments and view statements online

Don’t know which card to choose? Watch this video to see which card is right for you!

If you have any questions or concerns, give us a call at (303) 458-6660 or visit a branch today.

10 Jul

5 Essential College Items to Buy with Your RMLEFCU First-Time Visa

RMLEFCU First Time Visa for CollegeRocky Mountain Law Enforcement Federal Credit Union understands the value of opening up your first credit card account as a young adult. You’re establishing your creditworthiness early and setting the tone for the soundtrack that is your life. Whether that soundtrack will be “I Wanna Rock n Roll All Night” or “Pressure” is still to be determined. All you know is that your first semester of college is around the corner and you need a few things for your dorm.

Luckily, RMLEFCU offers a 6.75% APR* first-time Visa credit card to purchase these must have items. Read More

20 May

Financial Advice for Younger Adults

financial advice for younger adultsRMLEFCU employees were informally surveyed and asked, “If you could go back in time and talk to yourself at 21, what kind of financial advice would you give?”

In no particular order, here are 6 top responses:

  • If your employer has a retirement plan, you had better contribute. If they don’t, open an IRA. Unless you are planning on checking out early or not having any children or loved ones you leave behind, you will want to start saving as soon as you move your belongings out of your college dorm.
  • Cash or Debit Cards Only. Speaking of college, chances are you don’t have the income to offset any high interest credit card debt you may have been enticed to rack up. I know it’s tempting, but if you can’t get by on a debit card or cash, you probably don’t need it. P.S. That’s great that they were giving out those mini footballs/Frisbees/t-shirts and you needed/wanted/had to have one, but cut that credit card up now if you can’t afford it.
  • If you already have a credit card, remember this advice, “Do not put anything on your credit card that you can’t pay off the next month.” Look at it only as a way to afford something that you’ll have the money for in 28 days. Maybe the movie “28 Days Later” will help drive this point home since having credit card debt will be worse than a zombie chasing you. Zombies can be outrun, creditors will never stop coming after you.

Read More

20 Mar

6 Signs You Are Overextended Financially

worried-debt-financialAre you starting to avoid picking up the mail because it’s filled with bills? Does it seem like you are entering onto a financial treadmill where your savings and retirement accounts aren’t growing? Or worse, are they falling? We have assembled 6 signs that you are becoming overextended. If you recognize yourself in any of these, it’s time to have a financial sit down with an expert at RMLEFCU before its too late.

1) You know your CVV number by heart. And you’d better because it has been worn off due to using your credit or debit card so much.

2) You are charging more on your credit card than you are paying off each month. It’s just like a diet, in order to shake that debt, you have to remember less in, more out!

3) You are adept at hitting silence on your cell phone when certain numbers call. You are unable to pay your bills and if you do manage to pay them, you’re late and incurring extra fines, or just paying what you can. Read More

21 Jan

What is Overdraft Protection and Why Do You Need it?

What is Overdraft Protection?

RMLEFCU Overdraft ProtectionOverdraft protection is best described as a short term loan from your credit union that is activated when you purchase something with a debit card or a check that is more than the amount of money you have in your account. Instead of bouncing a check or being denied the transaction, the financial institution will cover the cost of the purchase for a fee, and expect that you will replenish your empty checking account soon. Overdraft protection has earned a bad reputation largely due to the hefty fees associated with each overdraft charge. Fees for each transaction can be as high as $35.00, so when you overcharge your account for that $5 latte, you’re really paying $40.00. However, there are many benefits to having overdraft protection on your account, including avoiding bounced check fees, Not Sufficient Funds (NSF) fees, the ability to make a purchase in an emergency situation, and avoiding the embarrassment of having a card turned down for insufficient funds.

Obviously, the best way to avoid overdraft fees and spending is to keep an eye on your bank account and manage your spending to fit your income. However, everyone runs into financial hiccups every once in awhile, and it’s comforting to know that overdraft protection is there for emergencies. To receive all the benefits of overdraft protection and avoid the nasty fees that come with it, ask your financial institution if they offer an overdraft line of credit or the ability to link your checking to your savings account. Read More