Costco Connection - October 2006

Update

Current news for Costco members

SERVICE UPDATES

PHO TOS: PHO TODISC

PRACTICAL TIP

Home equity alternatives

IF YOU’RE A HOMEOWNER, you can borrow against the value of your house through either a home equity line of credit (often called a HELOC or a line) or a home equity loan (often called a HEL or loan). Both are essentially a second mortgage.

Generally, a HELOC is a good choice to meet ongoing cash needs, such as college tuition payments or medical bills. A HEL is more suitable when you need money for a specific, one-time purpose, such as buying a car. Here’s a look.

Home Equity Line of Credit (HELOC)

Home Equity Loan (HEL)

What you get

Revolving credit with a specific credit limit of up to 100 percent of the value of a home (its value minus all debts against it). Some lenders allow borrowing up to 125 percent of the value of a home.

A fixed amount of money up to 100 percent of the equity in a home (its value minus all debts against it). Some lenders allow borrowing up to 125 percent of the value of a home.

How to qualify

Provide proof of income, home ownership, mortgage and amount of equity in the home. An appraisal is usually required.

Provide proof of income and home ownership, and proof that at least 20 percent of the value of the home is paid off. An appraisal is usually required.

How you repay it

Minimum payments (as little as interest only) each month; eventually the entire sum borrowed plus interest is repaid.

Fixed payments of interest and principal over a fixed period of time.

How long it lasts

You have a 10- to 20-year period when you can draw on the line (up to the credit limit), after which you have a fixed period to pay off the outstanding balance plus interest.

The term of the mortgage can be as short as a year or as long as 30 years.

Costs and fees

Usually no closing costs, but may have an annual fee.

Closing costs that are lower than for a first mortgage.

How you receive the money

Draw funds as needed using special checks or a credit card.

Receive one up-front lump sum.

ALSO:

See the payroll processing and health insurance articles on page 51.

Lending Tree’s Home Equity Financing program for Costco members offers HELOCs and HELs with great rates for Costco members and a Costco Cash Card ($100 for Executive Members, $50 for Gold Star/Business members) after closing. To find out more, go to costco.com, click on “Services,” then on “Home Equity Financing,” or call toll-free 1-800-496-8733.

NOVA INFORMATION SYSTEMS, Costco’s
merchant credit-card processing provider, has
introduced a new option for the service.
Merchants can now use Dynamic Currency
Conversion, converting international Visa
and MasterCard credit-card purchases
into the cardholder’s home currency at the
point of sale.

The benefits? International customers walk away from a transaction with a receipt showing exactly what they spent in their home currency, and the merchant receives a 1 percent rebate on the transaction. A definite win-win scenario.

To learn more about the Costco-NOVA program, call toll-free 1-888-337-1883 and mention source code 83105, or visit costco.com, click on “Services,” then on “Merchant Credit Card Processing.”

New Web look for
online investing

SHAREBUILDER, provider of Costco’s automatic online investing program, has just launched a new Web site focused on making it even easier for members to invest online. Enhancements include a simplified investing platform, streamlined account management system and more powerful research tools and resources.

Now members can also take advantage of market news, instant stock quotes and charts, analyst recommendations and a listing of the most actively traded stocks.

For more information, or to open an account, go to costco.com, click on “Services,” then on “ShareBuilder Online Investing.”

ShareBuilder is offered through ShareBuilder Securities Corporation, member NASD/SIPC, a subsidiary of ShareBuilder Corporation. ShareBuilder Securities Corporation is a registered broker/dealer that is not affiliated with Costco.