Using home equity to consolidate your high-interest credit card debt can be a very smart financial decision for most. During this process you are spreading your debt throughout mortgage payments while paying off creditors using your home equity. You won’t be actually lowering the amount of your debt, but you are lowering interest rates, making it a lot easier to pay off.
Here are some advantages of consolidating your debt using your home equity:
You pay a lower interest rate with a home loan than you would on a credit card, making it easier to pay off those debts.
The interest on your mortgage is usually tax-deductible whereas the interest on a credit card is not.
When you consolidate your debt, you only have to make one monthly payment as opposed to several. By having one lower monthly payment, you could be paying less each month than you would have if you hadn't consolidated.
Wednesday, June 13, 2007
Wednesday, May 30, 2007
Your Home Equity Line Of Credit and Remodeling…
People who choose to rent their home often miss out on a great lump of money that home buyers often use to their advantage. They have the advantage of using their home equity line of credit or HELOC. They are able to use a fair amount of the equity that has been built up in the home for any purpose they choose. There are many banks available that offer home equity lines of credit and this gives homeowners a helpful source of money for emergencies or any specific use.
Some homeowners may choose to receive their home equity line of credit in a lump sum, while others may choose to use the money as needed through check payments or an ATM debit card. This just depends on how the homeowner decides to use his or her line of credit.
So what would be a good way to use the money from your home equity line of credit?
How about remodeling!? Remodeling a home can be a great way of increasing the value of the property. Many people even go as far as making big additions to increase the home's value by adding extra rooms, converting the garage into a room or even adding swimming pool. Profit does not always have to be a homeowner’s focus, as the homeowner may choose remodeling for his or her own personal pleasure. Other common remodeling projects may include renovating a kitchen or bathroom, seeing out a new roof or paint job, and even making appliance upgrades. The possibilities of remodeling are endless.
But in the end, any way you choose to use your home equity line of credit, keep in mind that this process is similar to a mortgage and you are borrowing against the equity in your home. The money will always have to be returned. You should enjoy using the equity in your home, but also spend wisely.
Some homeowners may choose to receive their home equity line of credit in a lump sum, while others may choose to use the money as needed through check payments or an ATM debit card. This just depends on how the homeowner decides to use his or her line of credit.
So what would be a good way to use the money from your home equity line of credit?
How about remodeling!? Remodeling a home can be a great way of increasing the value of the property. Many people even go as far as making big additions to increase the home's value by adding extra rooms, converting the garage into a room or even adding swimming pool. Profit does not always have to be a homeowner’s focus, as the homeowner may choose remodeling for his or her own personal pleasure. Other common remodeling projects may include renovating a kitchen or bathroom, seeing out a new roof or paint job, and even making appliance upgrades. The possibilities of remodeling are endless.
But in the end, any way you choose to use your home equity line of credit, keep in mind that this process is similar to a mortgage and you are borrowing against the equity in your home. The money will always have to be returned. You should enjoy using the equity in your home, but also spend wisely.
Monday, May 28, 2007
Home Equity Line Of Credit and Emergency Situations…
Most people in America have a tendency to live from paycheck to paycheck, and the average household is flooded in credit card debt. Adding to that is the fact that Americans are saving money at the lowest rate in history. We have now developed a habit of spending what we earn and saving nothing. But what would we do in an emergency? How can the average American make sure there will be money available for those emergency situations?
A smart solution would be to open a home equity line of credit, because the equity in a home means the difference between the home value in the market and the amount of money owed on the mortgage. There have been record amounts of home equity due to rising real estate prices across the country, and homeowners have been forced to borrow against the equity in their home. Keep in mind that there are two main types of home equity loans. There is the line of credit loan and then there’s the traditional loan. As for the traditional loan, it lends a fixed amount of money that is repaid at a fixed interest rate over a fixed period of time.
The second is the home equity line of credit, which gives the borrower a great amount of flexibility. The borrower writes checks to use the money whenever they need it, but the money is capped at a certain limit or amount. The borrower only pays when they actually write a check to use a bit of the money, and the loan’s interest rate is adjustable. The line of credit is the correct source of funds for those emergency situations. The costs of obtaining a line of credit are low, and there isn’t much paperwork compared to the paperwork of obtaining a primary mortgage. One good thing about a line of credit is that there are no additional costs if the money isn’t used and the homeowner is under no obligation to use any of the money, but the money will always be there in time of emergency.
American homeowners may choose not to save much if not anything at all these days, but they can always rest assure that with a line of credit, the money will be there if an emergency should arise.
A smart solution would be to open a home equity line of credit, because the equity in a home means the difference between the home value in the market and the amount of money owed on the mortgage. There have been record amounts of home equity due to rising real estate prices across the country, and homeowners have been forced to borrow against the equity in their home. Keep in mind that there are two main types of home equity loans. There is the line of credit loan and then there’s the traditional loan. As for the traditional loan, it lends a fixed amount of money that is repaid at a fixed interest rate over a fixed period of time.
The second is the home equity line of credit, which gives the borrower a great amount of flexibility. The borrower writes checks to use the money whenever they need it, but the money is capped at a certain limit or amount. The borrower only pays when they actually write a check to use a bit of the money, and the loan’s interest rate is adjustable. The line of credit is the correct source of funds for those emergency situations. The costs of obtaining a line of credit are low, and there isn’t much paperwork compared to the paperwork of obtaining a primary mortgage. One good thing about a line of credit is that there are no additional costs if the money isn’t used and the homeowner is under no obligation to use any of the money, but the money will always be there in time of emergency.
American homeowners may choose not to save much if not anything at all these days, but they can always rest assure that with a line of credit, the money will be there if an emergency should arise.
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