A smart way to pay for energy-saving updates
The tenth of January marks the annual observance of National Cut Your Energy Costs Day, and it’s a great time to take a closer look at your home and see what you can do to lower your energy costs.
Some changes are easy and cost very little to make. For example, lowering your thermostat by just one degree can reduce your heating costs by as much as 3 percent, according to the Energy Department. Caulking your windows can reduce drafts that let heat escape and bring cold air in. During the summer months, using window coverings in rooms that receive the most sunlight can cut your air conditioning costs.
If you’re looking for more substantial savings, you may be thinking about making major updates to your home. Perhaps you’ve thought about buying a more efficient furnace. Maybe you’re ready to add insulation to your attic. Replacing older windows with newer models not only reduces energy use — it can brighten the look of your home.
Once you’ve decided what you’d like to do, it’s time to determine how to pay for it. If you don’t have the cash on hand, you could use a credit card or let the contractor provide financing, but that could mean interest rates of 21 percent or more! A smarter approach for many homeowners is what’s known as a home equity line of credit (HELOC).
A HELOC provides an easy way to tap into the equity you’ve built up in your home anytime you need to borrow. Equity is the term describing the portion of your home’s value that you currently own. If your home is worth $200,000 and you have $120,000 left to pay on your mortgage, you have $80,000 of equity ($200,000 minus $120,000).
A HELOC allows you to borrow up to a percentage of that equity any time you need to, usually by writing a check. You see, a line of credit is different from a one-time loan. It remains available to you for many years. You may use it to finance this year’s energy improvements, and after you pay it back, you can use it next year to remodel your kitchen. No matter how many times you access it, you only need approval when you first open it. And, because the line is based upon your ownership in the home, it’s like you’re borrowing from yourself!
There are smart reasons to turn to Indiana Members Credit Union for your HELOC. With our program, there’s no application Nfee, no closing costs, no annual fee, no penalties for prepayment — and our rates are competitive. Interested in learning more or applying for a HELOC of your own? Stop by any of our convenient locations or visit: https://www.imcu.com/home-equity.