Spr ing 2016
What’s inside this issue
Is a HELOC right for you?.......................1
When is a home equity loan or
line of credit a smart choice.................1
Auto loan pre-approval.......................2
Credit union difference........................2
Shred Days coming...............................3
Scholarship winners.............................3
New Board members...........................3
Auto loan payment vs. term length....4
Mobile check deposit...........................5
Using your chip card............................6
Should I or shouldn’t I?
When is a home equity loan or
line of credit a smart choice?
So, you’ve decided to use the equity in your
home to fund a major purchase or project,
but now you’re feeling nervous. Is it a wise
thing to do? Is it a smart thing to do? Is there a
better way?
The answer is: maybe. There are good reasons
to tap your home’s equity, and there are some
not-so-good reasons. Because these types of
loans are secured by your home, you should
carefully weigh the risks against the benefits.
Below are several scenarios where a home
equity loan or line of credit might be considered.
You need to repair your home.
YES: the equity in your home can be an
excellent source of funds when you are
facing a major home repair or want to add
upgrades that will increase the resale value of
your home. Repairing a faulty HVAC system,
replacing a leaky roof, repairing a cracked
foundation – these big-ticket items are not
S h o u l d I o r s h o u l d n’ t I? • c o n t i n u e d o n p a g e 5
Exploring the home equity line of credit
Is a HELOC the right solution for you?
A home equity line of credit (HELOC) is a form
of revolving credit in which your home serves as
collateral for the loan. It is more commonly known
as a “second mortgage.” Because your home is likely
to be your largest asset, you might consider a home
equity line of credit for the purchase of major items
such as education, home improvements or medical
bills, and not for day-to-day expenses.
With a home equity line of credit, you will be
approved for a specific amount of credit – your
credit limit. Your credit limit is the maximum
amount you can access at any one time while you
have the plan. Since you can get approved for an
amount of credit now, and not access the funds until
you need them, a home equity line of credit is a
good choice if you simply want the ability to access
cash as you need it and not pay interest until you
actually take an advance.
If you’re wondering if a HELOC is right for you,
consider the following.
Is your income stable?
Typically, HELOCs have
adjustable rates, and the
payments can change up
or down as the market
fluctuates. You will want to
evaluate your financial status
when looking at any mortgage
loan. Looking at your current
income and future income potential is central to
evaluating your income stability.
lenders measure your ability to manage the monthly
payments to repay the money you have borrowed.
To calculate your DTI, add up all your monthly debt
payments and divide them by your gross monthly
income. For example, if you pay $1,500 a month for
your mortgage and another $100 a month for an
auto loan and $400 for the rest of your debts, your
monthly debt payments are $2,000. ($1,500 + $100
+ $400 = $2,000). If your gross monthly income is
$5,000, then your DTI is 40 percent ($2,000 / $5,000
= 40%). Typically, lenders utilize 43-45 percent as
the maximum debt ratio. However, this does vary
by lender. Check with your lender to determine the
maximum debt ratio.
Can you afford the upfront costs?
When you take out a home equity line of credit,
there may be closing costs associated with your
request. These can include a title search, appraisal
or property valuation document, recording fees
and other miscellaneous fees. Not every
lender requires all of these expenses, so
In evaluating your income you will want to look at
your debt-to-income ratio (DTI). A DTI is one way
Exploring the home equity line of credit • c o n t i n u e d o n p a g e 4
Oregon State Credit Union • P.O. Box 306, Corvallis, OR 97339 • 800-732-0173 • oregonstatecu.com
Pre-approval has
its advantages
If you’re shopping for a new or previously owned
vehicle, consider getting approved for the financing
before you begin to negotiate the price of your new
car. A pre-approved loan shows you’re a serious
buyer ready to make a purchase. It gives the dealer
confidence in your purchasing power, and knowing
you are pre-approved for a loan alleviates the stress
for you and the dealer.
The first step in getting pre-approved is to submit a
loan application. Your application will be reviewed
to determine how much you can afford to spend
on a car and at what interest rate. Once approved,
you’ll receive a pre-approval certificate that you can
take to the dealer when you are shopping.
There are some very good reasons to get pre-approved:
Knowing how much car you can afford helps
narrow your search.
You can focus on those vehicles in the lot that meet
your needs rather than looking at models you
may not be able to afford. With your pre-approval
certificate in hand, you already know your budget.
A pre-approved loan
shows you’re a serious buyer
ready to make a purchase.
Pre-approval can simplify the haggling.
A skilled salesperson will try to shift the
conversation away from the price tag and refocus
it onto the size of the monthly payment. Since your
financing is already settled, you can skip that step.
pre-approved for financing. Part of this person’s
job is to offer you additional products. With a
pre-approved loan, you’ll be aware of the products
offered by the credit union, and you’ll be able to
make an informed decision.
You can be confident of having a great
interest rate.
Once you’ve successfully negotiated the price of the
car, you’ll be introduced to the finance officer who
can finalize the paperwork knowing you have been
The bottom line is that getting pre-approved for a
loan before you go auto shopping can reduce the
stress, simplify the negotiations, clarify your budget
and ultimately result in you getting a great deal on
a new or pre-owned vehicle.
Vive la différence!
In this issue of Homepage, we welcome our newly elected Board of Directors.
Experience the credit
union difference,
where one member’s
deposits become
another member’s loan,
and where earnings
enable competitive
rates and fees and
expanded services.
Oregon State Credit Union • Spring 2016 Newsletter
“Elected” is the most important word in the previous sentence. Credit unions are governed by members
who are elected into this leadership role by their fellow members. Each credit union member has an
equal vote.
The decisions of the elected Board are based on what is best for the membership as a whole. It’s a
philosophy that underscores the cooperative nature of credit unions, where one member’s deposits
become another member’s loan, and where earnings enable competitive rates and fees and expanded
services. This is in contrast to banks and other for-profit financial institutions, which are governed by
stockholders who focus on generating profit from the company’s earnings.
Please take a moment to welcome your newest member-elected Board members, and to
appreciate the time and energy they contribute to ensure that your credit union continues to
exemplify the credit union difference.
We are also pleased to welcome a newly appointed member of the Supervisory Committee. Jon
Sassaman was appointed by the Board to join this important committee, which ensures the integrity of
the credit union’s financial statements, oversees compliance with legal and regulatory requirements and
secures the annual independent audit.
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Get ready to shred
If you have sensitive documents to be shredded,
mark these dates on your calendar: June 11 in
Corvallis and September 10 in Keizer. Those are the
dates of this year’s final two shred events. Bring up
to three boxes of outdated documents, and let us do
the shredding for you. We’ll be shredding between
10 a.m. and 1 p.m., or until the trucks are full.
Corvallis: 10 a.m. to 1 p.m., June 11 at the Benton
County Fairgrounds, 110 SW 53rd St., Corvallis
Keizer: 10 a.m. to 1 p.m., September 10 in the
parking lot behind our Keizer branch, 4952 River
Road North, Keizer
Three great reasons to shred:
3 Protect your identity. Identity thieves
want your personal information. Don’t
risk the potential for identity theft –
shred instead.
3 Keep organized. Reduce the amount of
paperwork lying around your house or office.
Reduce and de-stress; be clutter-free.
3 Protect the environment. Save trees,
water and electricity usage. Be environmentally
conscious and proud to shred.
This free community service is open to all; you just drive-n-drop at the shred
location. Learn more at oregonstatecu.com/shred-day. See you there!
Congratulations, TLT
scholarship winners!
Congratulations to this year’s Tomorrow’s Leaders
Today (TLT) scholarship winners. Shown left to
right are:
Jackson Golletz, Cody Gustafson, Sadie Craig,
Isabel Solano, Norah Storniolo, Nicole Koski,
Aurora Jensen, Kyle Miller and Cole De Risio.
Not pictured: Chloe Mills.
Your Board of Directors –
ready to serve you
Thank you and congratulations to Oregon State
Credit Union members who were elected or
re-elected to the Oregon State Credit Union Board
of Directors and Supervisory Committee at the
recent annual meeting:
Recently elected to the Board of Directors:
• Kelley Kaiser
Recently re-elected to the Board of Directors:
• Jay Conroy
• Shannon Cruz
Recently appointed to the
Supervisory Committee:
• Jon Sassaman
Thanks also to our other Oregon State
Credit Union Board and Supervisory
Committee members:
Jay Conroy
Shannon Cruz
Kelley Kaiser
Jon Sassaman
• Board: Nadine Davison, Ron Stevens,
Paul Dickey, Mike Green, Tim Rocak
and Dave Wildman
• Supervisory Committee: Elizabeth Bell
and Thomas Elzinga
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Smaller payment
or shorter loan?
Loan vs. term
This is why you care
If you’re thinking of buying a car, you’re probably
thinking about make, model, color and year. You’ve
wisely done your research, and you know which
features you must have and which you can do
without. You’ve compared the fuel economy of
various models, the cost to insure each one and
the sticker price. While you’re on the subject, don’t
forget to think about how long you’re going to be
paying off your auto loan.
Your auto loan has two components: the interest
rate and the length of the term, or how long it will
take to pay off the loan assuming you never skip
any payments or make extra payments. The term is
important because, like the interest rate, it affects
the size of your monthly payment. A longer term
translates into a smaller payment; a shorter term
translates into a larger payment.
Monthly
payment
Length of the term
One way dealers negotiate with buyers is by
adjusting the length of the loan term. This is neither
good nor bad; for many people this is the best way
to make a reliable vehicle affordable. If you find
yourself engaged in this negotiation, remember that
it is in your best interest to keep the term of your
loan as short as you can comfortably afford.
So why doesn’t everyone take the longest term
they can get? Because doing so also increases the
overall cost of the loan. Each month, when you
make your car payment, you are paying some
principal and some interest. The total amount you
pay for the car is the sum of all the principal and
all the interest. The principal remains the same no
matter how long the loan term, but the amount of
interest you pay will increase as the term of your
loan grows longer.
To make the best deal possible, get pre-approved
for an auto loan before you go car shopping. You
and your lender can calculate how large a payment
you can comfortably afford each month and set a
loan term that fits within those parameters. With
that information in hand, you can drive your best
bargain at the car lot.
(Exploring the home equity line of credit • continued from page 1)
be sure to ask about closing costs before you
commit to the loan. In some instances the lender
will pay some or all of the closing costs depending
on the amount borrowed. In addition to possible
closing costs, most HELOCs have an annual fee. This
fee is usually charged on the one-year anniversary
of the loan and continues annually as long as the
line of credit is open for advances. It is usually
waived for the first year.
your home’s equity. Typically, lenders will allow
financing up to 80 percent of the home’s value,
and some – including Oregon State Credit Union –
allow financing up to 90 percent.
Can you handle fluctuating payments?
A HELOC is like a credit card: the more you advance
– or borrow – the higher your minimum payment
will be. Typically, these payments are interest-only
during the draw period – a period of time during
which you can take advances on the available
funds in your account. A HELOC also has a variable
interest rate, meaning the interest rate will rise
and fall with the changing conditions of the
market. If you need a set payment every month,
you should consider a home equity loan or some
other financial product.
In the following example, our homeowner owns
Does your home have enough equity?
You will want to check with your lender to
determine the amount available to you based on
Equity is the difference between what your home
is worth and how much you owe on it. As you make
payments on your home and reduce what you
owe, or the value of your home grows because of
favorable market conditions, your equity increases.
a home worth $200,000. The balance on his first
mortgage is $150,000, leaving him with equity
of $50,000.
$200,000 (value of home) minus $150,000 (balance
on mortgage) equals $50,000 (equity in home)
Getting a HELOC for the right reasons can make a lot
of sense, especially once you’ve carefully considered
the pros and cons. Armed with this knowledge, you
can make a rational and informed decision and be
confident you are making a smart choice.
Use your home equity to
brighten your summer days
3 Home equity line of credit from Oregon State Credit Union
3 Low rates and now offering low-to-no fees1
1
The 3.50% Annual Percentage Rate (APR) is accurate as of April 1, 2016, and may change without notice. Current HELOC rates range from 3.50% APR to 4.50% APR.
Your rate may be higher than the lowest advertised APR and will be based on your loan-to-value (LTV). The 3.50% APR is based on an 80% LTV. The APR will vary based on
changes to the Wall Street Journal Prime Rate. The current Wall Street Journal Prime Rate is 3.50%. The minimum rate is 3.50% and the maximum rate is 18%. An annual fee up to $75 may apply after the
first year; the annual fee will be based on your Member Merits category. Closing costs to open a HELOC vary between $0 - $1,000. NO CLOSING COSTS for Home Equity Line of Credit requests up to $100,000
(except for any required appraisal; borrow­er(s) pay for appraisal, collected upfront if required). For Home Equity Line of Credit requests in excess of $100,000, we offer a $500 credit towards closing costs. Flood
and/or property hazard insurance is required. Consult your tax advisor regarding the deductibility of interest. Other restrictions may apply. Organization NMLS #472475.
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P.O. Box 306, Corvallis, OR 97339 • 800-732-0173 • oregonstatecu.com
Deposit checks anywhere you have
a cell connection
Mobile check deposit is safe, secure and convenient
Have you ever needed to deposit a check but
couldn’t get to the credit union? No problem –
simply download the free Sprig by CO-OP app to
your smartphone or tablet, follow the enrollment
instructions and you’re on your way. The app allows
you to safely deposit checks into your credit union
account, effectively turning your smart device into
a portable branch.
The free app is simple to use, and can be
downloaded for Android™ or iOS devices. To set it
up, all you need is your account number, telephone
number and first and last name. Be sure to use
the same name and telephone number that is on
record at the credit union. Variations in the spelling
of your name will prevent the automated system
from recognizing you.
Using Sprig, you can deposit checks and manage
your accounts – anytime, from anywhere.
3 Choose your destination account.
3 Enter the amount of the check.
3 Take photos of the front and back of the
signed check.
3 Tap the “Deposit Check” button.
Checks are reviewed for accuracy before posting.
Fees may apply. For more information, visit
oregonstatecu.com/mobiledeposit.
(Should I or shouldn’t I? • continued from page 1)
normally covered by your homeowner’s insurance,
and delays in making repairs can lead to even more
expensive problems.
You need to upgrade or remodel your home.
YES: Leveraging the equity to pay for these projects
is a sound financial decision, especially if the
upgrade or remodel will increase the value of your
home. One particularly effective strategy is to take
out a HELOC to upgrade your home just before
selling it and use the proceeds of the sale to repay
the credit.
You need to pay college tuition.
YES: When you need funds in a hurry, a home
equity loan or line of credit may be easier and
faster to obtain than a student loan under some
circumstances. For instance, if you already have
an equity line of credit, you can simply write a
check or take an advance from the home equity
line to pay necessary college costs. Home equity
loans may be less costly than other loans, plus the
interest paid on a home equity loan may be tax
deductible. A home equity line of credit usually
carries a low interest rate, is easily accessible and
can provide immediate liquidity. Also, interest rates
on home equity loan types are usually lower than
on student loans, making the home equity line
of credit a more cost-effective option for college
tuition and costs.
You’re carrying high credit card debt.
YES: Consolidating consumer debt under a home
equity option can be a valuable consideration.
Home equity loans may be tax deductible and offer
lower interest rates. Plus, with the interest-only
payment options available on the home equity line
of credit, you may also reduce your expenses with
lower monthly payments.
You need to fund your business.
MAYBE: Some business owners look to the equity
in their home as a way to fund a new business
or provide an infusion of capital into an existing
business. A home equity line of credit, in particular,
can help a business navigate monthly cash flow.
The interest-only payment structure is attractive
Oregon State Credit Union • Spring 2016 Newsletter
5
during the slower seasons with the option to repay
principal during the boom seasons.
You need a new car.
MAYBE: Rates on auto loans are low right now for
many people, but that’s not always the case. Before
you buy a car using a home equity loan type, look
to your credit union for an auto loan and compare
the rates between the two types of loans. When
comparing rates, remember that a home equity
loan or line of credit may be tax deductible.
You just can’t seem to make ends meet
each month.
NO: Using a home equity loan – or any loan – to
pay normal, day-to-day expenses is a sign that
you need help with your budget. There are many
resources for people who want help managing
their monthly cash flow, including books, websites,
free or paid classes and seminars, and professional
financial advisors. There are several free resources
available at oregonstatecu.com. Look under the
“Tips & Tools” tab for calculators, helpful articles
and SavvyMoney, our free financial check-up tool.
If you need more help, call your local credit union
branch and ask for an appointment with a financial
services consultant to review your financial health.
Visit us on Facebook
S p r i n g 2016
Like, share, follow and friend us on Facebook. Check out financial
tips and tools. Stay informed. Learn about events, activities and
promotions at facebook.com/oregonstatecu.
What’s inside this issue
Is a HELOC right for you?.....................1
When is a home equity loan or
line of credit a smart choice.................1
Auto loan pre-approval.......................2
P.O. Box 306
Corvallis, OR 97339-0306
Credit union difference.......................2
Shred Days coming..............................3
Scholarship winners............................3
New Board members..........................3
Auto loan payment vs. term length...4
Mobile check deposit...........................5
Using your chip card............................6
Be secure – dip your chip!
Your Oregon State Credit Union Visa® card features advanced
chip-and-signature technology. The chip provides greater
protection against fraud when shopping, but only if you dip your
chip. So always dip unless the retailer tells you the card reader is
not chip enabled.
Using your card
Insert the chip portion of your card into the reader with the chip facing
UP. Your card will remain in the reader until your transaction is complete.
Follow the prompts on the screen, and always remember to REMOVE
YOUR CARD when done.
Questions?
Using your chip-enabled credit card correctly ensures your transactions
and information are secure. The encrypted microchip stores information
required to authenticate, authorize and process transactions. No personal
information is stored on the chip card, and unlike a magnetic stripe card,
it’s virtually impossible to create a counterfeit chip card.
Go to oregonstatecu.com/chip-card
or call 800-732-0173.
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