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Funding Tomorrow’s Needs Using Today’s Low Rates


Wondering where you’ll find the money to pay for college tuition? Want to build that addition on to the house to accommodate Tutu? Do you have enough savings set aside for emergencies?

A healthy financial future can be yours if you do what many financially savvy people do: talk to a personal banker and come up with a plan.

The basics of financial planning include having and maintaining a budget, paying your bills on time and monitoring your cash flow. And according to Nohonani Leslie, personal banker at First Hawaiian Bank, many are finding peace of mind by taking out a home equity line of credit as a way to meet future expenses like tuition, long-term care, or even as a safety net.

“Planners definitely do this and usually it is done with our home equity line of credit,” says Leslie. “I’ve had many customers take lines out for future expenses – taxes, renovations and tuition, to name a few. One of the great things about our Equity First Line is that once it’s established, you are not required to immediately draw on it. So it can sit there and you will not get a bill until you start to use it.”

In fact, since there are so many advantages of having an Equity First Line, Leslie suggests applying for it at the same time you refinance your first mortgage at lower interest rate.

“Saving time and money is on everyone’s mind,” she says. “I want to save money when I go to the grocery store. Shopping for a loan or line of credit is no different. People always want the best deal in the shortest amount of time.”

Natalie Werts, personal banking officer at First Hawaiian, agrees that taking out an equity line when you refinance your loan saves you time and money, “since we can often use the same credit report, appraisal and other necessary documents while processing both loans. Instead of having to order them twice – we can fill out the application and gather paperwork all at once.”

Debbie Harbottle, First Hawaiian assistant vice president, also points out that in an unpredictable rate environment, lowering your monthly mortgage payments by refinancing and putting money aside in an emergency fund while rates are still low, makes a lot of sense.

“We do not know where interest rates will be a couple of years from now so if you are anticipating college expenses, I always recommend that you take out an equity line to pay for tuition in the future,” says Harbottle.

And while the equity line products are perfectly suited for tuition costs, they can also be a good way to pay for long-term care. “Just recently,

I helped a customer who needed $300,000 to $500,000 just to buy into a long-term care facility,” recalls Werts.

The bank’s customers are also using equity lines to pay for home improvements, such as expansion for extended Ohana and even photovoltaic systems, to reduce future utility expenses.

Werts says, for many, the equity line is simply set aside for emergencies. “Since we never know when an emergency will occur, it is peace of mind knowing the equity line is readily available when you do need it,” adds Werts.

“Recently a customer of mine came to me on the verge of tears,” Leslie recalls. “His mother had passed away and he was in danger of losing the family home that had been given to him and his brother. While he wanted to keep the home for sentimental reasons, his brother wanted to sell it. In working with my customer, we determined a line of credit may be the best fit for him because not only was he going to buy out his brother’s interest in the property, he also had some hefty taxes to pay at the end of the year. In the end, my customer was able to keep the home that he grew up in and that meant so much to him.”

While it is comforting to have appreciation and equity in your home, you may be sitting on something that can help you meet major short-and long-term expenses. Remember, after all, that it’s your money. Tapping into it with an equity line of credit may help you achieve the secure financial future you are looking for.

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