We know the police in particular love their toys, and some of those toys are Harley-Davidsons, RVs, and boats. And hey, God bless them, because you know what? If anyone deserves it, it’s first responders to help them enjoy their lives.
I’ll speak to the credit part first. we have a partnership with someone who can help with your credit. If you are looking for a police loan for one of those aforementioned toys but your credit score isn’t where it needs to be our “patrolman credit union” has someone who can help you. Maybe you don’t have the credit to buy that toy today but we can help you to build a better credit score in the near future. Whether you are working with our parent company, Chicago Patrolman’s Federal Credit Union, or the National Police Credit Union this service is free of charge again and part of the benefits in working with us.
For those who have good credit and just want tap into the equity of their home, you have to realize that home equity lines of credit are tied to the prime rate plus or minus an adjustment. When money is cheap you borrow. When money is expensive, you don’t necessarily want to borrow.
Well, money’s expensive right now. Home equity lines of credit are going to be driven by a floating rate to prime. So, right now and probably for at least the near future, those rates are likely going to be a little bit higher than the client expects.
If you are looking for home equity loans for police officers is that really something you want to do right now? Is it a good idea? I think it has to be a very specific circumstance by which you understand that there has to still be a repayment on that loan.
A lot of home-equity products include a variable rate, but they also include an interest-only payment for a set period of time. I would be careful with that because you’re not paying down principle. As a result of that, you might wind up having a situation that isn’t much different from a credit card.
The reality right now is if you’re looking to do a home addition, or some type of work on your home, it may be a wise idea to use the equity in your home. However, if you’re using it to consolidate debt then you have to make sure that you cancel that debt out and not just taking out other debt.
At Police Mortgage we don’t do law-enforcement loans with an interest-only component, which is good. But you also have to understand that you could be adding another 15 or 20 years to something. I say that when you are tapping into your equity, there needs be a means to an end. There also has to be an exit plan.
Police and many other first responders are on a fixed income. So, I generally don’t advocate taking out equity unless there is a plan and understanding to pay it down. In other words, “How are you gonna get out of that situation?”
Are you anticipating that you’re going to refinance the house and then consolidate the two mortgages? Well, two years ago, that was a great idea. Now it’s disaster. You probably can’t do that without blowing your mortgage payment up.
So, the person coming to a professional police credit union who has a temporary need, and they know that they’re going to be able to replenish that balance and pay down the debt, then tapping into equity may make sense. That’s the real true spirit of a home equity line of credit.
There’s also something called a fixed rate home equity loan, which is not a variable rate. This is one of the police loans that we offer that has a set dollar amount and a set loan term, but those rates are fixed and are higher. They also come with no flexibility because you have to take the money all upfront. Then you are paying installments that are secured by a mortgage against your property.
Again, if you have an exit plan; if you know what you’re trying to do with a police home loan; and you have a plan on replenishing it; by all means, go for it. Those are the aspects of a law enforcement house loan our clients need to consider. We at Police Mortgage are happy talk to people with the intention to inform and educate.
You want to set yourself up for success, not failure. You set yourself up for success by handling debt responsibly. Part of handling debt responsibly is honestly asking yourself :
“Do I really need the addition to the house?”
“Do you need to consolidate that debt?”
“Do you really need that boat?”
Because the two happiest days somebody owns a boat is the day they buy it and the day they sell it, right? So, let’s be honest about that and understand the consequences.
Police Mortgage specializes in conventional mortgages, purchase money transactions, FHA loans, and VA loans. Led by founder and CEO John Aretos, Police Mortgage is known and respected for providing clients with exceptional service, customized terms, quick and easy closings, and low money down options. To learn more about Police Mortgage, call 312-499-8878.
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