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When homeowners dream of renovating their kitchen or encounter an unexpected, costly expense, they often don’t realize the solution might be sitting right at home – in the equity they’ve built.

Area Retail Banking Manager Loralee McKee sees these situations regularly at First Federal, where she supervises four branches across the Magic Valley. With nearly nine years helping families navigate financial decisions, she’s learned how to help homeowners understand the value of home equity loans and how they work.

“A home equity loan uses the equity you’ve built in your home as collateral,” Loralee explains. “You receive a lump sum with fixed monthly payments of principal and interest, so you know exactly what you’ll pay each month.”

When Home Equity Makes Sense

Home equity loans can be used for various reasons: home improvements that increase property value, debt consolidation to simplify finances, unexpected medical expenses, or helping family members through difficult times. “You can typically use a home equity loan for any legitimate purpose,” Loralee notes.

When thinking about a home equity loan, consider whether you have sufficient equity in your home, what you’re trying to accomplish, and if you’re comfortable with the monthly payment. For debt consolidation, many families find they can reduce their overall monthly payments while simplifying their finances.

Loralee recalls helping a customer consolidate high-interest credit card debt into a single, lower home equity loan payment. “They had ample equity in their home and were only making minimum payments on multiple credit cards. The home equity loan put them in a much better financial position with a payment they could actually manage.”

Understanding Your Options

First Fed offers both home equity loans and home equity lines of credit (HELOC). A home equity loan provides a fixed amount at a fixed rate, which is ideal when you know exactly how much you need. A HELOC works like a credit card secured by your home, allowing you to borrow what you need when you need it, paying interest only on what you use.

“If you’re planning a home improvement project but aren’t sure of the final cost, a line of credit might work better,” Loralee explains. “If you know you need a specific amount, the fixed-rate loan provides payment predictability.”

Interest rates on loans depend on factors like your credit score and equity position. Repayment terms at First Fed range from three to ten years, depending on what works best for your situation.

The First Fed Difference

What sets First Fed apart is local decision-making and loan servicing. “When you call with questions, you’ll talk to someone here in the Magic Valley or Treasure Valley,” Loralee emphasizes. “You’re not sitting on hold for hours or dealing with people who don’t understand your community.”

Individuals shouldn’t feel self-conscious about thier financial situation either. “We want our customers to know they don’t need to hesitate asking about solutions we might offer to help with their financial stability,” Loralee says. “Ask lots of questions – that’s how we find the best option for you.”

For more information on home equity loans, visit BankFirstFed.com/HomeEquity