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Pros and Cons of an MSUFCU SmartLine℠ Home Equity Loan

April 27th, 2023 | 3 min read

By Michael Flory

2022 Custom Built Kitchen Remodel. Beautiful white cabinets, with warm wood hood vent. Galley style against the wall.

If you're planning a home remodel and looking for ways to finance it rather than drawing from your savings, using your home's value might be a good option for you. 

The Michigan State University Federal Credit Union (MSUFCU) offers a loan that turns your home’s value into available credit that you can draw from in fixed-rate segments.

This loan product is called the SmartLine℠ home equity loan and can be used to finance your upcoming home remodeling project.

As an MSUFCU preferred builder with 15+ years of remodeling experience, we have helped many homeowners like you partner with them to finance their dream home remodel. 

In this article, you’ll learn what the SmartLine℠ home equity loan is, how the loan and repayment structure works, and how the loan amount is determined.

What is an MSUFCU SmartLine℠ home equity loan?

SmartLine℠ is MSUFCU’s home equity loan. It operates similarly to a standard home equity loan where the value of your home is used to determine the loan. Your home is used as collateral to secure the loan.

There is one main difference between a standard home equity loan and the SmartLine℠ home equity loan:  The SmartLine℠  loan allows you to pull segments from your total loan amount and only be charged interest on what you borrow from your loan.

This is a major benefit if you are making a purchase, such as a home remodel, and know the total amount you plan on spending.

You can withdraw only what you need, and pay interest on that amount. The rest of the loan is paid back with zero interest.

With interest rates as low as 7.5%, the SmartLine℠  home equity loan is an affordable and viable option to pay for your home remodel.

Pros of an MSUFCU SmartLine℠ home equity loan

Low-interest rates: With interest rates as low as 7.5%, a SmartLine℠ loan is an affordable option to access the equity in your home to pay for your remodel. 

Flexible repayment terms: Each segment drawn from your loan has flexible repayment terms of 12 - 180 months. With several repayment options, you can choose a repayment plan that fits your monthly budget.

Fast and easy application process: The application process for the SmartLine℠ home equity loan is quick and easy, allowing you to get the funds you need fast.

Only pay interest on accessed funds: The SmartLine℠ loan allows you to pay interest only on the funds you withdraw, which saves you money compared to other types of loans. 

Cons of an MSUFCU SmartLine℠ home equity loan

Closing costs: While MSU Federal Credit Union offers low-interest rates on home equity loans, there are additional costs associated with these loans, including closing costs and valuation fees.

Long-term commitment: The SmartLineSM home equity loan is a long-term commitment, with repayment terms that can last for many years. This may not be the best option for borrowers who only need short-term financing.

Not all homes are eligible: Not all homes are eligible for a SmartLineSM home equity loan. Eligible properties must be located within the state of Michigan and be one of the following types:

  • Condos
  • Primary residences
  • Owner-occupied second homes
  • Modular and manufactured homes
  • One- to four-unit buildings, with owner occupancy in one of the units

Borrowing against your home: The SmartLine℠ home equity loan involves borrowing against the equity in your home, which means that if you default on the loan, your home may be at risk.

Next steps to apply for an MSUFCU SmartLine℠ home equity loan

Rather than drawing from your bank account, using the value of your home can be a convenient option for financing your upcoming project. 

Locking your interest rate on fixed-rate segments allows you to access the funds you need to complete your remodel without having to pay interest on the unborrowed portion of your loan.

MSUFCU makes applying for the SmartLine℠ loan easy. You can apply on their website, by phone at 517-333-2424, option 3, or at your local branch location.

To learn about Custom Built’s design and remodeling services for your upcoming home remodeling project, reach out to one of our project development advisors. We’d love to discuss your project and see if we are the right fit for you.

To read about another financing opportunity for your project, learn about the MSUFCU home improvement loan.

*The information provided in this article is for informational purposes only and should not be considered official financial advice. It's always best to consult with a financial advisor or professional before making any financial decisions.*

One SmartLine Home Equity Loan per household. Eligible properties include primary residences; owner-occupied second homes; condos; modular and manufactured homes; and one- to four-unit buildings with owner occupancy in one of the units. Properties must be located within Michigan. Consult with a reliable tax advisor about the deductibility of home equity loan interest. The closing cost of $199 plus the property valuation fee, if required. You may only lock a segment of your loan during your draw period. There is no fee for the first segment; however, you will be charged a $25 fee for each subsequent segment. A fee of $25 will apply to requests to unlock a segment. Balances on segments reduce the availability of the line of credit. Your locked segment fixed interest rate will be determined based on your creditworthiness at the time your fixed-rate segment is approved. Actual APR will be determined by the member's credit score at the time of the loan request. Rate subject to change. This product has a variable rate that is based on the market rate (prime plus margin). Your margin will be between 2.00% APR and 7.00% APR. Your overall rate (prime plus margin) will never fall below 2.00% APR, nor will it exceed 18.00% APR.

Michael Flory

Michael brings over 2 decades of building and remodeling experience to his position as the Owner and Visionary of Custom Built. Michael’s passion to make an impact on the home building industry has led him to serve for over ten years at the local and state Home Builders Association, culminating as President of the HBA of Michigan in 2020.