Natural gas costs are expected to rise 46% and heating oil costs are expected
to rise 31% this winter.* With the cost of heating on the rise, homeowners are
preparing for the worst this winter. What can your credit union do to help?
We recommend offering your members a home equity loan or line of credit product
that will finance energy reducing home improvements. Your members will benefit
from reduced heating bills and your credit union will benefit from stronger
While many of us are already cutting leisure expenses in anticipation of dramatically
higher utility bills, others are becoming more educated about alternative energy
options and home improvements that can help reduce heating bills.
For a significant one-time cost for the product and installation (usually several
thousand dollars), energy efficient furnaces and boilers or heating systems
that use wood, wood-pellets, or even corn are available for home use. Since
many alternative energy sources are less expensive than natural gas or oil,
the total cost, over time, will be much less than traditional heating sources.
In addition, more traditional home improvement projects can also reduce heating
costs. Adding or replacing insulation, installing new windows, replacing old
appliances with energy efficient ones and cleaning chimneys and furnaces can
help a home become more energy-efficient.
Encourage members to research alternative heating options or to upgrade existing
equipment and consider the use of a home equity loan or line of credit from
your credit union to fund the project.
If your members are new homeowners or do not have a lot of equity built up
in their home there are innovative home improvement solutions to offer them,
even if they have no equity. There are a variety of home improvement and home
equity HLTV protection options that can expand your home improvement lending
and accommodate more of your members borrowing needs.
Home improvement-related HLTV protection can support lending programs offered
to your members, such as "a stated value home improvement program,"
or by working with your local home improvement dealers you can provide "special
loan programs for energy efficiency." These types of member loans can often
be closed in the same day without title or appraisal work.
Talk with a credit indemnity loss protection specialist to provide you with
the tools you need to make more loans to your members. Keep in mind, you make
the loan to your members under your credit guidelines and use credit indemnity
loss protection underwritten by insurance companies to protect you against losses
due to charge offs or foreclosures.
Old Republic Insured Credit Services, Inc. (ORICS) can help you better meet
your members' needs. Loss protection provided through ORICS is seamless to your
member and enables you to make more loans to more members. For over fifty years,
ORICS has helped credit unions expand their lending capability. For more information
and to find out why your credit union should consider partnering with ORICS,
contact us at 1.800.621.7873 or visit us on the web, www.oldrepublicics.com.
* "With Winter Near and Heating Costs High, Many are Taking
Preventative Action," New York Times, 11 October 2005. sec. A, p. 18.