Home Equity Line Article
About five years ago I moved from the ranks of being a renter to that of being a homeowner. Now, not a week goes by that I don’t receive some type of offer through the mail encouraging me to refinance my mortgage, open a home equity line of credit (HELOC), or apply for a home equity loan.
Payoff High Interest Credit Card Debt! Lower Your Monthly Payments! Buy A New Car! Refinance And Get Money Now! scream the slogans splashed across the envelopes.
The promotional letters inside point out how easy it will be for me to “get the extra cash you need NOW!” They promise “no out of pocket costs” with a newly refinanced 30-year loan.
Could I use some extra cash NOW? You bet I could! Who needs high interest credit card debt? Not me, no way, no how! Buy a new car? Hmmm, I like that new Pontiac G6 I’ve seen on tv, maybe in a sleek titanium color with black trim?
For thousands of U.S. households “Home Sweet Home” is rapidly being replaced with a new sentiment - “Home Sweet ATM.” According to the latest Federal Reserve study, 45% of homeowners who have refinanced their mortgages pulled cash out and 74% wound up lengthening their mortgage by about six years. Only 17% shortened their loan term opting to downsize to a 15-year mortgage.
In a period of six years, Americans have more than doubled the amount owed on home equity loans and lines of credit, nearing $766.2 billion, according to the Federal Reserve.
If you’re in your 40’s and you refinance on a new 30-yr. loan, you’ll be in your 70’s by the time your loan ends. Even if you shave off a few years by paying down your principle, you’re still risking not owning your home “free and clear” as you approach retirement age.
What happened to the era when your home was considered your nest egg to be used only for life-threatening or life-changing events like paying for a child’s wedding or for a medical emergency? And worst of all, many new homeowners are using their home’s equity as another source for financing new debts.
Think twice before using home equity to pay off credit card balances. If you’re already overspending on your credit cards now, what makes you think anything will be different after you pay them off with a loan or line of credit? Many people just wind up deeper in debt or facing bankruptcy because they couldn’t resist charging their cards up again.
Keep this in mind before tapping your home’s equity - Your loan or HELOC is secured by your home. Default on the loan and you could lose your house, even if you declare bankruptcy!
The best use for home equity is to make improvements that add value to your home. Remodeling a kitchen or bathroom, adding an extra room or creating a master suite are just a few of the “hot” improvements that can really pay off when it comes time for you to sell.
If your home truly is your nest egg, be smart about how use its equity. Make sure that it fits in with your overall financial plan and golas. Otherwise, you could be left without a nest and just the egg!
About the Author************************************************************
© 2005, www.yourfreecreditreportnow.com
Author: James H. Dimmitt
James is editor of "TO YOUR CREDIT", a free weekly newsletter with tips to help you manage your personal finances. Subscribe today and receive his e-book “IDENTITY THEFT- How To Avoid Becoming the Next Victim!” and other free bonuses by visiting
http://www.yourfreecreditreportnow.com
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Helpful Home Equity Line Links
Countrywide - Home Equity Loans
Research home equity options, speak to a loan advisor and find the current rates and costs of home equity loans or line of credit with Countrywide. ... A home equity line of credit is a lot like a credit card ... One of the best parts of a home equity line of credit is that the interest rate ...
Western Sierra Bank
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Home Equity Line. A Smart Way to Borrow... • No Closing Costs. • Interest Only Payments. • Low Rate. • Interest May Be Tax Deductible ... A Home Equity Line is simply a line of credit secured by a mortgage on the borrower's home ...
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SPRING Equity Promotion! Spruce up this spring at an incredibly low rate of... Prime Minus 1% ... Let the equity in your home go to work for you by funding your improvement projects at an ... features of a GSCU Home Equity Line of Credit, such as easy ...
Home Equity Loans at NetBank
... Home Equity Line. (introductory rate fixed for 6 months as low as 6.50% APR thereafter ... Maximum APR for a Home Equity Line of Credit is 18%. Following are ...
Home Equity Loan and Line of Credit rates -- Compare rates
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Home Equity Line of Credit. What is a Home Equity Line of Credit? This type of loan is secured by real estate and is advanced by the borrower when he/she decides to use the loan funds. ... are two accounts involved in the Peoples Home Equity Line. A special "equity" checking account and the loan account ...
Citibank Official Site - Home Equity Loan and Line of Credit
Home equity loans and home equity credit lines that are available with no points. Visit our site and qualify online in 10 questions or less.
Home Equity Line - The Mortgage News
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Home Equity Lines - take advantage of the Equity in your home for a tax-deductible line of credit
... Account Interest Checking Money Market Personal Checking CD IRA Savings Home Equity Line Home Equity Loan Small Business ... Open a home equity credit line based on the equity you have ...
Home Equity Credit Lines
Home Equity Credit Lines. Using a credit line to borrow against the equity in your home has become a popular source of consumer credit. And lenders are offering these home equity credit lines in a variety of ways. ... is to contact different lenders, compare options, and select the home equity credit line best tailored to your needs ... Is a home equity credit line for you? ...
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