Loan Services

Rebates When a Rebate is Better Than a Low-Rate Credit Union Loan?

Shopping for a new car? You will find several financing options. These days, more and more dealers are offering low-rate loans or cash-back rebates. While it's nice to have choices, they can be downright confusing. And expensive. In the final analysis, you may be better of with conventional auto financing from your credit union.

Here's why: If you choose the dealers's rebate plan, you forego the low-interest rate loan, but you get a $2,000 cash rebate. Adding the rebate to your down payment can make credit union financing very attractive-because the larger down payment reduces the amount you need to finance.

GAP Plus Protection

For a low premium of $295, GAP Plus will help pay the difference between your primary insurance settlement and what you still owe on the car.

Fill in the GAP on your next vehicle loan! There could be a big difference between what your insurance will pay and what you owe on your loan. Most cars depreciate by thousands of dollars as soon as they are purchased. Unfortunately, if your vehicle is stolen, accidentally damaged beyond repair, or otherwise declared as a total loss, you are still liable to pay the difference, or the ''gap,'' between your insurer's settlement and your loan balance. That gap will come out of your pocket for a vehicle that, for all practical purposes, no longer exists.

Refinancing

Refinancing should be simple

If you are looking to take advantage of a better rate or wanting to consolidate some debt, a TopMark Federal Credit Union refinance (Refi) may be a good option for you.

Being prepared to select the right loan is actually the 1st step in our recommended refinance (Refi) process. Basically, a Refi lets you use your home’s equity to invest in your future. You pay off your existing mortgage and create a new, more favorable one. You may encounter many of the same procedures with your refinance as you did for your original home loan.

When To Refi and When Not to Refi
As with any big financial decision, it’s good to do some research first. Refi’s can save you money under the right conditions. We’ve outlined some scenarios you can use as basic guidelines; however, every situation is different. You can call a TopMark at any time to discuss your specific circumstances at (419) 879-1500.

You may want to consider refinancing if you can do the following:

Reduce your monthly payments.
There are a number of ways to do this, like getting a loan with a lower interest rate. The other common way to decrease your monthly payment is by extending the term of your loan from 15 or 20 years to 30 years. Lengthening your term may reduce your monthly payment; however, you will be paying more interest in the long run.

Take advantage of a lower rate.
A general guideline is the 1% rule. If an interest rate is available that is 1% lower than your current rate, it may be a good idea to Refinance. When you Refinance, you will have new costs associated with that loan. The decrease in your interest, if it’s 1% or more, may allow you to recoup those costs, setting you up to actually save money.

Reduce your term from a 30 year loan to a 20 or 15 year loan to save money on interest.
Although your monthly payments will increase, you will save money in interest with a shorter-term loan versus a longer-term loan.

Save money by consolidating a 1st and 2nd mortgage into a single loan.
In some cases, the monthly mortgage on the consolidated loan may be lower than your combined payments.

Use the equity in your home to access cash. You may opt to pay off high-interest credit cards, make home improvements or pay for your child's education using your home's equity. Equity is the dollar value difference between what you owe and the home value of your property. When you refinance for an amount that is more than what you owe on your home, you can get the difference paid to you in cash, known as a cash-out Refi. It's important to note that when you take out equity, you own less of your home and it will take time to build your equity back up.

When You Should Not Refi:
If you are almost finished paying off your first mortgage. A Refi gets less and less advantageous the more mature your loan is and the more you’ve paid off. If you have a 15 year loan, and you only have 5 more years left before you pay off your mortgage, do not Refi. A refinance will result in the loss of equity and will also add more debt to your plate – something you don’t want to do when you’re so close to paying off your home loan.
If you are planning on moving soon.
here's something called a break-even period. When you Refi, you end up paying closing costs, just like you did with your first mortgage. Your Refi should eventually off-set the additional costs you paid to close on your new loan. For example, if your closing costs were $1000 and you save $100 a month with your new interest rate, it will take you $1000 / $100 = 10 months to break even. If you don’t plan on being in your home for 10+ months, then you should not Refi.