Call them wise and seasoned or just born in the right economic times, but statistically speaking, “Perennial” homeowners are the most financially stable age group in America. According to recent Census Bureau data, 78.5% of Americans 65 years and older own their own home—the highest percentage of any age group. And this group of older baby boomers and members of the “silent generation” have generally owned their homes longer than younger age groups, giving them more time to build up equity over the years.
As this group heads into retirement, they are starting to use their home equity in new ways. In a 2019 survey, over half of baby boomers plan to age in place instead of downsizing or moving to a retirement community. For some it’s a matter of loving their homes and wanting to stay close to friends and family. Other retirees that had planned on downsizing are now staying put as they find themselves competing with younger buyers for the same limited number of affordable homes.
The National Association of Home Builders predicts that around 10% of the $214 billion home improvement industry will soon be made up of aging-in-place home projects. This includes things like bath bars, accessible bathtubs, front door ramps, and other upgrades that make homes safe and comfortable for older occupants. Using a home equity loan or home equity line of credit can be an affordable way to pay for these kinds of home improvements.
Some Perennials are using a HELOC to finance unexpected medical expenses or to cover the cost of in-home care. And at any age, home equity can be an affordable way to consolidate high-interest debt. But these older homeowners aren’t just focused on aging when it comes to leveraging their home equity. Some are using it to help finance vacation homes or rentals. Some are using it to remodel basements and other spaces to bring in extra income from tenants or short-term vacation rentals. Others are using their HELOCs as a quick and reliable source of emergency funds.
Custom Fit Home Equity
Home equity can be a powerful tool when it comes to financing some of life’s big expenses. At Salal, we offer our members a flexible and easy to use tool called Custom Fit Home Equity. Whether you’re investing in home improvements or just want the comfort of knowing you have access to funds if you ever need them, Custom Fit gives you options when you need them.
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Custom Fit Home Equity
|LINE OF CREDIT - VARIABLE RATE||3.99% - 6.24%**||No minimum draw amount. Revolving line of credit with 10-year draw period |
15-year amortization after end of draw period.
|FIXED-RATE LOAN SEGMENTS||2.41% - 6.41%***||$5,000 minimum draw amount. 5, 10, and 15-yr terms available. Fully amortized principal and interest payments.|
*APR=Annual Percentage Rate. Actual APR will be based on creditworthiness, loan-to-value (LTV), and the owner occupancy status of the subject property.
**Index=Wall Street Journal Prime Rate. The APR is variable and may change during the term of the loan. The minimum APR is 3.24% and the maximum APR is 18%.
***10-Yr Nominal Constant Maturity Treasury. EXAMPLE PAYMENT—Fixed-Rate Segment: $356.39 a month based on a 60-month term, $20,000 loan at 2.66% APR.
Subject to credit approval; not all will qualify. Maximum LTV available based on approved credit and valuation of the property. Homeowners insurance required. Residential real estate only. Subject property must be located in Washington state and vested in borrower's name. To open the account, members pay half of the appraisal fee (member portion approximately $390-$450); all other fees are covered by Salal Credit Union. Interest may be tax deductible. Consult a tax advisor regarding the deductibility of interest. Salal Credit Union NMLS #416045.
Rates are current as of June 5th, 2020.