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Improving your home with equity: |
| Home improvements can
help accelerate the value of your home or get your
home ready to sell. Whatever the reason, a
Home Equity Line of Credit or Home Equity Loan
can give you the flexibility to make the
improvements you need - without tapping into cash
that you may want to set aside for other purposes.
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Here are more tips to consider when you plan to improve your
home:
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Unless you use a home equity loan to
refinance your existing first mortgage loan, there is no
change in the terms of your existing first mortgage loan
when you take out a home equity loan. Typical loan terms
range from 5 to 30 years. Any existing second mortgage
loan, however, must be paid off with the new home equity
loan.
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If you make home improvements with the
specific intent of increasing the resale value of your
property (as opposed to just making it more comfortable to
live in), make sure the renovation will add the value you
want. For example, a kitchen renovation might recover the
money spent and more, whereas adding a pool might not.
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Before deciding on a final loan amount,
complete a cost breakdown that itemizes the estimated cost
of your home improvement. Include items needed such as
building materials (lumber, concrete, etc.), labor,
decorating (paints, tile, etc.) and a contingency amount
for possible unplanned expenses.
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A home equity loan can provide a
tax-deductible way for improving your home to look the way
you really want it to, while increasing the value. Note,
however, that you should always consult a tax advisor
regarding the deductability of interest. There are
typically no restrictions for home improvement, as long as
they are within the boundaries of local building
requirements. You have the choice of doing the improvement
work yourself, or using a contractor. TOP |
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Debt
Consolidation
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Are you buried in debt? With a Home Equity
Line of Credit or Home Equity Loan you can leverage the equity
value in your home to pay off debts or consolidate your
high-rate credit cards into one bill and one low, monthly
payment
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| Consolidating debt is smart
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By using a home equity loan to replace credit cards, auto
loans and other high-interest debt you can:
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Save on interest payments: rates on home
equity loans may be lower than rates on credit cards by 7%
to 10%-or more!
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Save on taxes: interest
payments on home equity loans are potentially
tax deductible, but credit card and auto loan
interest payments are not (Please consult your
tax advisor regarding the deductibility of
interest).
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Save time: make a single loan payment
instead of payments on different schedules to many lenders |
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Home Equity / Debt Table
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 TOP
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Payment terms to fit your budget
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A home equity loan or line can also help you manage
high-interest debt by offering flexible payment options that
work with your budget.
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A home equity loan allows you to spread
payments over a longer period of time, if you choose, for
a more manageable monthly payment. In addition, choosing a
home equity loan with a fixed payment might help you
escape the "minimum-payment syndrome" that can
prolong payoff and cause you to accumulate greater
interest charges.
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A home equity line of credit allows you
to set your own repayment schedule, with flexible monthly
payments so that you can accelerate or extend the payoff
as your budget requires.
Remember, whether you use a home equity loan or home equity
line of credit for debt consolidation, you should always have
a plan that will help you avoid incurring future debt.
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Save thousands in interest-and pay off earlier TOP
See how easily-and quickly-you can save more than $9,000 in
interest payments by consolidating $20,000 of high-interest
debt with a home equity loan. And, in a 30% tax bracket, you
may also save more than $1,000 in taxes on the $3,732 paid in
home equity loan interest payments. That's a total savings of
at least $10,000! (Note that these examples are for
illustration only, and may not apply to every situation.
Consult g-Atlantic and speak to a qualified professional for
more information regarding possible savings.)
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To determine if getting a loan will help
you save money, you should: TOP
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- Estimate how much your monthly debt
payments will be reduced by consolidating your debt
- Calculate how much you'll need to invest
in closing costs to open the loan
- Determine how long it will take to
"break even" by dividing the loan closing costs
by the amount that your monthly debt payments are reduced
- Consider how long you plan to stay in
your home compared to the time that it takes to break even
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Make
Large Purchases TOP
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| With a Home Equity Line of Credit or Home
Equity Loan you can enjoy great rates to:
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Take a dream vacation
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Help pay for a wedding
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Purchase your dream car |
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School
Tuition TOP
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Many American families are facing the reality of expensive
college tuition for their family members. Whether you're
financing a family member's degree or certificate program or
taking classes to further your own career or personal
development--you can leverage the equity in your home to pay
for education, including college tuition.
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A Home Equity Loan or Home Equity Line of Credit
can provide a flexible and easy solution to the challenge of
covering educational expenses with:
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Interest rates that may be lower than
other types of education financing
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Flexible payment options
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Potential of tax-deductible interest
(Please contact your tax advisor concerning the
deductibility of interest) TO |
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Additionally, there are many reasons that home equity loans
are the smart choice for financing education:
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No school certification is required - you
determine how much you need for education expenses
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No financial aid forms to complete
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Students may attend full-time, half-time
or part-time (less than half-time)
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Use your funds for any education-related
expense, even a computer or previous school fees
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Funds are sent directly to you, not to
the school
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Funds can be used to pay your children's
education, even if they do not qualify for government
loans or grants |
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Best of all, the home equity loan application process is fast
and easy. For those who need to supplement their financial aid
or for those who receive no assistance, a home equity loan can
supply the funds for all their education-related
expenses - even a computer for college or previous school
fees. TOP
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