Home Equity Loans: A Useful Financial Tool -

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Home Equity Loans: A Useful Financial Tool

Home Equity Loans: A Useful Financial Tool

The investment need of an individual varies with time. Thus the need to buy a car or invest in a new house, which may have seemed "beyond means" a few years ago, may be a relevant and wise decision today. However, taking a consumer loan at existing rates may add to the existing debt burden of the individual. This is where home equity loans can be of help.

A home equity loan can be a very useful financial tool in the hands of the borrower, particularly if the avenue where the borrower would invest the loan amount would otherwise have to be financed at higher lending rates.

Thus the borrower can get access to cheaper loans, which can be used to finance secondary requirements like buying a car or modifying/renovating his/her existing home, repaying existing debt, medical costs, etc.

Home equity loans have other advantages too:

Tax deductions: The interest payable on the secured equity loan is deductible up to a maximum of $100,000 or the equity value in your home, whichever is less. Thus besides access to lower rates of interest, the equity loan also gives the borrower tax benefits.

Lower interest rates: As discussed earlier, a home equity loan can give access to loans at a lower rate than other means of debt like credit card debt or consumer loans. This can amount to a considerable savings on interest payments. Hence these loans can be used to retire old high-cost debt and help in the consolidation of debt.

Ease of qualification: As compared to other loans, it is easier to qualify for a home equity loan. This is because the loan is disbursed against the equity of your existing home. This results in a faster and relatively hassle-free disbursement of loans.

Flexibility of payment: The borrower can use the loan as and when required and may also be able to decide when the principal repayment should be done. This proves to a useful tool in the case of money management, particularly in the case of emergencies.

Home equity loans, if used wisely, can improve the financial standing of an individual as they provide easy and relatively cheap access to money.

Home Equity Loans - Rates, in depth articles and professional second mortgage advice. Find the lowest home equity loans rates and lenders.

In The News:

ABC News
US MBA's Mortgage Applications Index Fell 1.5% (Update1)
Bloomberg - Aug 20, 2008
... as fewer homeowners sought to refinance their loans The Mortgage Bankers Association's index of applications to buy a home or refinance a loan dropped ...
US mortgage applications hit 8-year low Times Online
Mortgage application volume hits multiyear low The Associated Press
Mortgage volume fell 1.5% last week: MBA MarketWatch
USA Today - Bizjournals.comall 242 news articles

Housing And Economic Recovery Act
Mondaq News Alerts (subscription), UK - 13 hours ago
The Act also expands the target population served by the FHA and creates the "Hope for Homeowners" voluntary FHA-insured mortgage refinance program. ...

Mortgage penalty unlikely to vanish
Fall River Herald News, USA - 2 hours ago
I have a prepayment penalty on my mortgage loan for three years. I’d like to refinance sooner. Is there a way a lender can waive the penalty? ...

COMMENTARY: FHA is riding to the rescue, taxpayers beware
Reuters - 9 hours ago
(Ann Schnare is an economist specializing in housing and mortgage finance. She was former senior vice president for corporate relations at Freddie Mac and ...

Mortgage Rates for Best Borrowers Rise as Bonds Slump (Update2)
Bloomberg - 7 hours ago
21 (Bloomberg) -- A decline in mortgage bond prices is raising interest rates on US home loans, even for borrowers least prone to default. ...

Some Fear Commercial Property Loans Will Be Next Stage in Downturn
New York Times, United States - 1 hour ago
For Wall Street banks, which hold about $100 billion of commercial mortgage-backed securities, the prospect has fanned new worries that a deterioration of ...

How to assume the mortgage of a troubled homeowner
MarketWatch - 4 hours ago
I am (and was for a while) looking to refinance my four-unit owner-occupied property in Santa Monica, Calif., but I am having a hard time finding a good ...

Citizen
Fannie, Freddie: Plunge then rebound
CNNMoney.com - 7 hours ago
The Wall Street Journal Thursday said that the firms needed to refinance $225 billion in mostly short-term debt by the end on September. ...
Business Highlights Forbes
Freddie and Fannie Bail-Out Imminent Sovereign Society
Fannie and Freddie crisis deepens FT Alphaville
The Australian - Forbesall 2,084 news articles

Housing market keeping couples together
Chicago Sun-Times, United States - 9 hours ago
If one wants to keep the home, it's difficult to refinance the mortgage so the departing spouse can be cut loose from the debt. And evaporated home equity ...

Earthtimes (press release)
A Treasury bailout of Fannie and Freddie is all but a foregone ...
FT Alphaville, UK - 18 hours ago
Failure to refinance would be an immediate signal to the Treasury to step in; it would force its hand. Mish Shedlock notes that $225bn is an aweful lot to ...
Rising Cost of Debt Stokes Fears Wall Street Journal
Freddie And Fannie Bailout Fears Mount Investor's Business Daily (subscription)
all 309 news articles

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Home Equity Loans: A Useful Financial Tool

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