This article is a script adaptation from Money Tip Tuesday, a segment of Triangle Credit union’s Making Personal Podcast.
SPEAKERS
Ryan Campbell, Mortgage Originator and Terri Connolly, Podcast Host
Terri 00:06
We’ve said it before and we’ll say it again, your home equity line of credit or HELOC can be used for so many purposes. Now that we’re in the back-to-school season, we’ll talk to Triangle Mortgage Originator and Making Money personal podcast contributor Ryan Campbell about how to use a HELOC to help pay for unforeseen college expenses. Welcome to Money Tip Tuesday from the Making Money Personal podcast. Hey, Ryan, how are you?
Ryan 00:34
I’m doing good. Thanks for having me back.
Terri 00:36
Oh, it is our pleasure and I hope that your summer is going well.
Ryan 00:41
It’s a little rainier than I expected, but we are managing to still have some fun.
Terri 00:45
That’s awesome. It has been a very unpredictable summer with a lot of rain and sometimes unbearable heat. Right now, we’re in that pre-fall feel, and I love it. Ryan, we’re going to go ahead and jump right in to talk today about these, you know how you can use your HELOC for unforeseen college expenses. As a parent of a college kid, I know that there are going to be these college expenses that come due in a couple of weeks, can you tell me how a HELOC will help to pay for some of these costs?
Ryan 01:18
Yeah, there’s no argument that college provides an amazing education and life experience, but as many students and parents find out quick, it can also be quite expensive, with unfortunately, no signs of that getting any cheaper in the future. Some kids are lucky enough to obviously get scholarships and grants, but that’s not always enough to cover everything; there can still be some cost gaps. An Equity Line is going to give you just another tool that can be strategically used to help cover these costs. Now, I’ve been to college and some of those random expenses could be something like maybe you just don’t qualify for as much Student Aid as you thought you would, and you need that money. Maybe you were planning on getting a job on campus, and either can’t find one or you just realize after starting your classes that they’re going to be a little harder than you thought and maybe you can’t work as many hours as you thought. It could be something that’s not directly school related. Maybe the student gets an opportunity to do maybe some sort of once in a lifetime internship, but it’s off campus, and they don’t have a car. Suddenly you need to get a cheap car quickly so that they can take advantage of this. And then something like I did, which was an exchange program overseas for a year. It was a great experience, but unfortunately it came with a bunch of extra plane tickets and an unfavorable exchange rate. An equity line is going to give you access to money to help with those costs. In most cases, an equity line is going to give you longer terms and lower interest rates than other unsecured loan options that you might come across. And another great thing about it is that you can use the money as you need it. You’re not paying interest on money until you need it so maybe some semesters you need more than others, and this gives you that ability to manage it as needed.
Terri 03:09
Those are awesome tips and excellent examples, Ryan. I was thinking about lab fees, and some of the book expenses that are $200 or more. I hadn’t thought of some of those other things you mentioned so that’s excellent.
Ryan 03:26
Everyone’s situation is going to be so unique. Some loans are very specific and can only be used for certain things. The equity line can be used for anything. They can just call and say they need extra money for groceries that month or something and this gives you that flexibility to use it when and where you need it.
Terri 03:46
That’s awesome. Great point. Ryan could you just take a few minutes to explain how I can set up a HELOC if I don’t have one yet?
Ryan 04:15
Whether you have a HELOC already or you’re looking to get one set up, I would suggest reaching out to someone on our mortgage team. We can discuss your goals and make sure we’re getting you started in the right direction. If you’ve already done your research and you’re ready to apply, the easiest way is to go on to our website and get an online application started; this will give us an opportunity to kind of see all your financials, credit, and everything we need and then go from there. After we have this information, we can help guide you in a couple different directions.
Terri 04:46
Excellent. So how long does it usually take to set up a HELOC?
Ryan 04:57
Because there are appraisers involved, it is a little more difficult because of the amount of people who are adding equity lines and refinancing their homes due to the great rates. We’re telling people right now to expect around 45 days from your application to the loan funding.
Terri 05:17
Okay, great. Here is my last question: what is the process for me to access my funds so I can pay those last-minute college expenses that we discussed?
Ryan 05:30
This is the great thing: TCU makes it easy to access the funds. If you have online banking through our portal, it’s as easy as just transferring the money from the equity line into your savings or checking account. Now, for most people, I always try to recommend having a checking account because that will give you access to having checks and a debit card, which just gives you more ways to potentially pay for any expense whether you call in a payment over the phone or make it in person.
Terri 06:00
That’s awesome and super easy. I use online banking and the mobile app all the time so I’m constantly transferring funds—it couldn’t be any easier.
Ryan 06:11
Some people like it while others think it could be a little too easy because you have easy access. But it’s meant to be convenient and that’s the reason you have this is it’s there for emergencies. It’s there for that quick use.
Terri 06:30
That’s awesome. Well, that pretty much wraps it up, Ryan, thank you so much for hopping on and spending a little bit of time with us—we appreciate you sharing this very valuable information with all our listeners. We really appreciate it.
Ryan 06:44
Had a great time. Hopefully I’ll be back again.
Terri 06:45
Yeah, absolutely. No, we can guarantee it, you will be back again. Thanks so much again. This has been Money Tip Tuesday from the Making Money Personal podcast. If you would like to speak with Ryan or one of our Mortgage Originators, about setting up a home equity line of credit visit trianglecu.org and select our mortgages page or call our local number at 603-889-2470. Thank you for listening to today’s money tip. For other tips and episodes, check out the Making Money Personal podcast and be sure to follow us on Facebook. Have a great day, everyone.
