Are you thinking of remodeling your kitchen, or do you need help with tuition expenses? Home equity loans offer a low-cost option that’s quick and easy to obtain. There are two types of home equity loans—a regular home equity loan and a home equity line of credit, or HELOC. With a regular home equity loan you get a lump sum of money and, depending on the loan terms, you pay a predetermined amount back each month for the life of the loan. This option makes sense if you have a large expense up front, such as business start-up expenses. A HELOC differs from a conventional home equity loan in that you don’t receive the entire sum up front but will draw against a “line of credit” to borrow sums that total no more than the credit limit, similar to a credit card. You can use our online banking...
A debt-to-income ratio is a measure of financial stability calculated by dividing monthly minimum debt payments by monthly gross income. This calculation gives a straightforward depiction of your financial position. Typically, the lower your ratio, the better handle you have on debt. Determining your debt:
- Collect your most recent credit billing statements for current balances
- Outline your total monthly bills using two columns: bill type (such as car loan, mortgage/rent payments, and so on) and monthly payment. Do not include bills such as taxes and utilities in this list.
- Add up the total for all of the monthly payments listed.
- Calculate your monthly before-tax income. If you receive a paycheck every other week, as opposed to twice a month, your monthly gross income is your before-tax income from one paycheck times 2.17.
- Your monthly debt-to-income ratio is calculated by dividing your monthly debt payments by your monthly income. For example, someone...