by: Jakob Jelling
Households across the country are finding themselves in a similar situation. They lack the financial funds to make the necessary changes to their home and need to find a way to fund upgrades and eliminate debt. A popular way of financing these changes without killing themselves is by taking a home equity loan to pay down their debt.
The Home Equity Loan has become a fast-track way of paying down large credit card debt, financing college education and even taking a vacation. Since the stock market has lost quite a bit of appreciation, people have been purchasing homes as a means of investment, thus sending housing prices through the roof. With higher prices comes a great deal of appreciation in the home. People who have found themselves in 20 – 30 thousand dollars in debt can pay it down by taking a home equity loan. Home Equity Loans have been a source of relief and flexibility to get the homeowner out of debt and moving forward in life.
The home equity tax shelter
The greatest benefit from taking a Home Equity Loan is being able to crush debt, but also reduce the amount you owe the government every year. Most loans by design do not provide any tax relief, whereas a Home Equity Loan provides a direct line item to reduce your debt. To figure out your home equity value you can hire a professional appraiser to come out and tell you how much it is worth to a bank or financial institution. Once you have that figure you can easily find out how much equity you have in your home. For example, should your home appraise for $150,000 and you owe $ 60,000 you have $90,000 in equity. This equity will not become a taxable event should you buy a bigger home and spend more money. Should you step down in your home, you can be penalized for the difference, provided that you have not already taken the one-time exemption allowed by the government.
Debt relief
Once you have found out how much your home is now worth, it is time to apply for the loan. During the loan process you can bring your credit card statements as well as any other debts you may owe to the table. Explain to the loan officer your situation and ask that these debts also be included in the Home Equity Loan. If your home has at least 40% equity in your property you should have no problem getting them dissolved into the loan. There are many reputable lenders who will help you find the right loan for you. The Home Equity Loan will restart the 15 or 30-year clock from day one. Your payment may increase or decrease depending on how much debt you add or cash you take out of the property.
By Jakob Jelling
http://www.cashbazar.com
About The Author
Jakob Jelling is the founder of http://www.cashbazar.com. Visit his website for the latest on personal finance, debt elimination, budgeting, credit cards and real estate.
Home Equity Loan vs Home Equity Line Of Credit
by: Gary Gresham
Many people confuse a home-equity line of credit with a home-equity loan. With so many different kinds of loans it can get confusing. So lets look at the difference so you can get a better understanding of what works best for you.
Home Equity Line Of Credit
Home-equity lines have experienced unprecedented growth in the past two years and presently represent 80 percent of the home-equity market.
A home-equity line of credit is a varible interest rate loan that works like a credit card. You get a pre-determined loan amount that is secured by your home.
Most come with checks and credit cards that you can use to draw on as you need the money.
Most lenders only require an interest only payment for either 10 or 15 years. After that the loan must be paid in full. The reality is most people will sell their home and pay the loan off before it actually comes due. You could always refinance if you decide you want to stay in your home.
An important thing to remember on a home-equity line of credit is it is based on varible interest rates. These varible rates will cause your payment to change as the interest rates move up or down.
Home Equity Loan
A home-equity loan has a fixed interest rate and fixed payment. These loans are more like a standard second loan on your home. Like a home-equity line of credit, these loans are also secured by your home.
You borrow a certain amount of money for a specific period and get the whole sum at the close of the loan. The payments a on home-equity loan are typically based on 10 to 15 years and are level.
People who aren't comfortable with an adjustable or varible rate payment tend to favor a home-equity loan instead of a home-equity line of credit. As interest rates rise, these loans become more popular than home-equity lines of credit.
A home-equity loan will have a higher interest rate because it is fixed. Varible rate loans usually have lower starting interest rates. But if interest rates are rising, a varible rate could catch up or even get higher than what the fixed rate is.
About The Author
Gary Gresham is a mortgage loan officer and the webmaster for http://www.1stopshoppingonline.com. He offers you purchase, refinance, debt consolidation or home equity loans at competitive rates at http://www.1stopshoppingonline.com/home-loan.html
Gary@1stopshoppingonline.com
Many people confuse a home-equity line of credit with a home-equity loan. With so many different kinds of loans it can get confusing. So lets look at the difference so you can get a better understanding of what works best for you.
Home Equity Line Of Credit
Home-equity lines have experienced unprecedented growth in the past two years and presently represent 80 percent of the home-equity market.
A home-equity line of credit is a varible interest rate loan that works like a credit card. You get a pre-determined loan amount that is secured by your home.
Most come with checks and credit cards that you can use to draw on as you need the money.
Most lenders only require an interest only payment for either 10 or 15 years. After that the loan must be paid in full. The reality is most people will sell their home and pay the loan off before it actually comes due. You could always refinance if you decide you want to stay in your home.
An important thing to remember on a home-equity line of credit is it is based on varible interest rates. These varible rates will cause your payment to change as the interest rates move up or down.
Home Equity Loan
A home-equity loan has a fixed interest rate and fixed payment. These loans are more like a standard second loan on your home. Like a home-equity line of credit, these loans are also secured by your home.
You borrow a certain amount of money for a specific period and get the whole sum at the close of the loan. The payments a on home-equity loan are typically based on 10 to 15 years and are level.
People who aren't comfortable with an adjustable or varible rate payment tend to favor a home-equity loan instead of a home-equity line of credit. As interest rates rise, these loans become more popular than home-equity lines of credit.
A home-equity loan will have a higher interest rate because it is fixed. Varible rate loans usually have lower starting interest rates. But if interest rates are rising, a varible rate could catch up or even get higher than what the fixed rate is.
About The Author
Gary Gresham is a mortgage loan officer and the webmaster for http://www.1stopshoppingonline.com. He offers you purchase, refinance, debt consolidation or home equity loans at competitive rates at http://www.1stopshoppingonline.com/home-loan.html
Gary@1stopshoppingonline.com
Home Equity Loan Online – What To Do With Your Home’s Equity
by: Carrie Reeder
If you are wanting to get a home equity loan, rates are still low enough that you may want to make use of that equity in your home. Do you need some ideas on what you could do to multiply your equity or make some extra money off of the capital that could be available to you?
Here are some suggestions of ways to put the equity to good use when you go to take out a home equity or cash out refinance loan.
Do a home improvement that will increase the equity in your home more than the cost of doing the improvement. As an example, I have heard rumors that adding a deck to a home, because of the amount it increases the homes resale value, can add up to 4 times the cost of actually installing the deck.
If you have a low interest rate on your home, invest your equity in a low risk investment that has a much higher return on your money.
Buy an existing business or start a new business with the equity capital in your home. If you can start a low risk business, take the opportunity to let your equity work for you.
Use the equity as a down payment on an investment property or a rental.
Use it to consolidate high interest debt and possibly save yourself hundreds of dollars a month to put toward something else.
Use it to finance your education and increase your earning power.
If you live in an area zoned for this, you could finish a basement or area of the house to rent out. You could create a separate living space or apartment on your property.
Just be careful to not do anything risky with the equity in your home. If you can get a low enough rate, it may be worth taking that money and investing it somewhere else.
If you would like to view our recommended home equity loan lenders or get more information on home equity loans click here: www.abcloanguide.com/homeequityloan.shtml
About The Author
Carrie Reeder is the owner of www.abcloanguide.com. ABC Loan Guide is an informational loan website with informative articles and it has recommended lenders to help you get the best mortgage service possible.
carrie@abcloanguide.com
If you are wanting to get a home equity loan, rates are still low enough that you may want to make use of that equity in your home. Do you need some ideas on what you could do to multiply your equity or make some extra money off of the capital that could be available to you?
Here are some suggestions of ways to put the equity to good use when you go to take out a home equity or cash out refinance loan.
Do a home improvement that will increase the equity in your home more than the cost of doing the improvement. As an example, I have heard rumors that adding a deck to a home, because of the amount it increases the homes resale value, can add up to 4 times the cost of actually installing the deck.
If you have a low interest rate on your home, invest your equity in a low risk investment that has a much higher return on your money.
Buy an existing business or start a new business with the equity capital in your home. If you can start a low risk business, take the opportunity to let your equity work for you.
Use the equity as a down payment on an investment property or a rental.
Use it to consolidate high interest debt and possibly save yourself hundreds of dollars a month to put toward something else.
Use it to finance your education and increase your earning power.
If you live in an area zoned for this, you could finish a basement or area of the house to rent out. You could create a separate living space or apartment on your property.
Just be careful to not do anything risky with the equity in your home. If you can get a low enough rate, it may be worth taking that money and investing it somewhere else.
If you would like to view our recommended home equity loan lenders or get more information on home equity loans click here: www.abcloanguide.com/homeequityloan.shtml
About The Author
Carrie Reeder is the owner of www.abcloanguide.com. ABC Loan Guide is an informational loan website with informative articles and it has recommended lenders to help you get the best mortgage service possible.
carrie@abcloanguide.com
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