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Blog > 2013 > March > This Unique Refinance Option Will Have y...
March 05, 2013

This Unique Refinance Option Will Have you Cheering

by Simmons, Dusty

You know that old Sinatra song "I Did it My Way"? That's exactly how some lenders are positioning unique mortgage refinance solutions designed to help homeowners save money and pay off their mortgage on their own terms.

Mortgage lenders like Financial Center have stepped out of the traditional mortgage box to create tailored products to attract new members, helping them accomplish their mortgage payoff goals alongside some of their other financial and life goals - like when their kids enter college or by retirement. And they've made the products so attractive, they're hard to beat.

So what's different? Financial Center's Home Equity One is actually a fixed-rate home equity loan in which the property is placed in the first lien position. In layman's terms, it's a home equity first mortgage. It offers all the things homeowners love about a traditional mortgage - a fixed interest rate and term, and the interest is tax deductible. Yet, it also offers flexibility for the member - you can choose your repayment term, you can cash out equity for other uses, and closing costs are minimal (typically less than $600).

Ridiculously low rates help you save over the long term. Mortgage rates have been low for quite some time and if you're like most homeowners, you were able to lock in a 30-year term between 4.00% and 4.50% APR in the last few years. Financial Center mortgage expert Sven Leander says that refinancing again into a shorter term can still save you thousands over the life of your loan.

"Rates on shorter terms are around 3.00% APR (15 year) and may dip even lower for ten and even five year terms. Economists say that mortgage rates will begin a steady climb upwards in the next six to 12 months, so if you're still on the fence about refinancing from your 6.00% or even 4.00% mortgage, the time really is now."

You choose the term. While traditional mortgage terms range from 15 to 30 years, the Home Equity One product allows the homeowner to choose when they'd like to pay off their home.

"During our free pre-approval process, we talk with homeowners about what their financial goals are, and then we help them determine a sensible timeframe for their mortgage payoff," says Leander. "Most people don't want to be making house payments into retirement, so that's often a popular timeframe. Depending on the homeowner's age, that may be 12 years away or 30 years away."

Are there any drawbacks? Because the Home Equity One product is not a traditional mortgage product, it doesn't offer the option to escrow taxes and insurance into the monthly payment. Leander says that's not a bad thing. "We encourage members who have this product to be smarter tax and insurance savers. We help them set up a special savings account to escrow their own tax and insurance premiums, and instead of the mortgage lender having the benefit of interest earned, the homeowner earns it."

Investing locally. As a locally-owned credit union, Financial Center is committed to ensuring investments made here, stay here.

"Financial Center members take pride in knowing that the money they've loaned from us stays right here in the Indianapolis community," says Leander. "And, local decision making and local servicing mean when you have a question or problem, you have someone nearby who can help you."

For more information on the Home Equity One product, stop by one of our Center locations, call 317.916.7700, or apply online today.  

Category: FCFCU
Your savings federaly insured to at least $250,000 and backed by the full faith and credit of the United States Government: NCUA, Equal Housing Lender, ESI