you have a decent amount of equity in your home? Do
you have other debts such as credit cards, or would
you like to make an improvement on your home? It might
be worthwhile to see if home equity loans are
right for you. Benefiting form the equity in your
home can be a good financial decision if interest
rates are low enough.
things through carefully before you get a home equity
to apply for home equity loans
improvements - You can use your home equity to
pay for major remodeling and other home improvement
projects. If you are thinking of remodeling your kitchen,
bathroom (upgrading kitchens and bathrooms are actually
the 2 top ways to increase your home's value if you
are not increasing your house's square footage), adding
a deck or replacing your windows, it might make sense
to apply for a home equity loan.
debts - Use a home equity loan to consolidate all
of your bills into a single monthly payment. Not
only will you have just 1 payment to make instead
of many, but the interest is likely to be tax deductible.
In addition to paying a lower rate compared to credit
card debt, but you are getting an added tax break,
further lowering your costs to repay your outstanding
debts. When applying for a home equity loan, make
sure the interest is tax deductible. Read
IRS Publication 936 to determine if your home equity
loan interest is deductible.
large purchases or expenses - You can use a home
equity loan to pay for large expenses such as
a new car, education, medical bills and investments.
Be careful here. What you don't want to do is use
what is likely to be your most precious financial
asset (your home's equity) on frivolous expenditures
such as vacations, luxury cars, or trying to keep
up with the Jones's.
applying for a home equity loan:
take out a home equity loan if you can't make the
- Read the
fine print carefully. Know what you are agreeing to
when you sign your home equity loan documents.
get upside down! Many lenders offer home equity
loans on your house even though there is no equity
in it. The limit is usually 125% of the value
of your home. You now have loans (and debts) greater
than the value of your house. To get right side up,
you will either have to pay down the loans or hope
that the increase in your home's value bails you out.
If you have to sell your house you will find yourself
in a very difficult position.
- If you
do get a home equity loan to consolidate debts,
try to make extra payments towards principle every
month. Otherwise those credit card debts will be with
you for the life of your loan, 30 years in the case
of a 30 year mortgage loan!
is the next step?
you own a home? If you do, it is quite likely that
you can get a home equity loan. You can transfer your
existing credit card debt, finance home improvements,
pay for education or anything else that will help your
long term finances with a home equity loan.
Mortgage or Home Equity Loan
with America's Lending Partners. Within minutes you
can find out what rates and amounts you qualify for.
Turn your finances around today!