One Of The Few Loans We Do Recommend — But Only If You Follow These Simple Rules
Keywords: home equity, home improvements
Debt is a success killer. It prevents you from reaching your goals. As a general rule, debt is something you should avoid whenever possible. There are exceptions to the rule. But you have to be very careful.
One of the exceptions is a loan that can actually help you reach your goals faster. Of course, this same loan can also cause tremendous debt problems.
The loan is called a home equity line of credit. It is essentially a loan you take on the value of your home that’s paid off. So, if you owe $100,000 on a $150,000 home, a bank will let you take out a line of credit on some percentage of that $50,000 you have in equity.
The money can be used for just about anything, but that’s where most people get in trouble. The original purpose of these loans was to make improvements or additions to your home. In recent years, though, people have used their lines of credit to buy cars, boats, and vacations.
What’s wrong with that? Unlike a conventional car or boat loan, which is usually three to five years, a line of equity’s monthly payment is usually just a minimum payment, much like a credit card. The longer they can keep you in debt, the more money they make off of you. So you’re going to pay a lot more in interest than you would with a traditional loan. Because most people pay only the minimum payment, it’s conceivable — and probable — that you’ll be paying off the car or boat many years after you’ve sold it.
Second, if you default on the loan, you don’t lose your car or boat. You lose your house.
But, if you use the equity line of credit to build value in your home, it can be a valuable tool. Remodeling a kitchen or a bathroom, building an addition or finishing a basement can pay off big time when you sell the house.
Unfortunately, most of these loans carry variable interest rates. And when the rates go up, so do your payments. This can be a problem for budgeting and it can cause hardship if the rates go up fast.
The good news, though, is that two large banks Wells Fargo and Bank of America are now offering fixed-rate home equity lines. I suspect that more banks will follow suit. The current weakness in the housing industry has also hit the mortgage business. As a result, they’re looking for ways to make their products more appealing. And this is definitely more appealing. At this point, you can only fix the rate on a portion of your loan. But I think that portion will grow as the product grows in popularity.
Steve Kroening writes for Success magazine and also publishes Wisdom’s Edge. You can get Biblical tips on health, finance, relationships, parenting, and success, delivered to your email inbox every week. Simply visit www.wisdomsedge.com and sign up for this free e-zine.
Previous Articles Highlighter:
The Home And The Need To Belong (1)
Just look around for a while and you will soon come up trumps with a great mortgage loan to suit your requirements. As for being indebted for years to come, that is the price of trying to find your roots.
How To Repay A Student Loan (2)
First of all, review and comprehend all of the communication you have between you and your lender, servicer, and/or loan holder. Make sure that you are quick to respond when required to do so by the creditor.
Fall Recorded In Financial Confidence (3)
According to the financial company, higher house prices in these regions have meant base rate increases by the MPC have a larger impact upon consumers' ability to make secured loan repayments.
How To Beat Gas Stations At Their Own Game (4)
I remember when gas was selling for well under a dollar back in the 1990s. Here are a couple of simple tips on how to save money at the pump.
A Guide To Career Development Loans (5)
However, if you are unemployed the loan may be able to cover all of the fees for your course. Investing in your future CDLs are a great way to invest in your future career and give you the skills that you need to progress further.
A More Optimistic Future For The Marbella Property Market (6)
New pavements are being placed, new asfalt on roads, monuments being cleaned and the Marbella sea promenade is being improved. One of the major works which has started is the tunnel for the main road when it passes San Pedro.
Different Credit Repair Options (7)
We will discuss here a few options that allow you to draw loans without the aid of your credit card. A Home Equity Loan The home equity loan is very popular, both with the investor and the creditor.
Londoners 'Intent' On Buying Property (8)
In research carried out by mform, just over a third (35 per cent) of adults living in the capital are looking to take out a mortgage within the next three years.
How To Refinance Your Credit Card Dues (9)
And this would be because when they are paying in cash they actually feel what they are spending. Paying through credit card is just about signing on a piece of paper and one often loses the sense of how much his credit has added up to.
Teenage Holiday Spending 'Could Impact On Parents' Finances' (10)
One way to help with budgeting is not to send them away with too much cash, which is a temptation". Earlier this year, Alliance & Leicester claimed that Britons are not taking enough time to consider how they will fund a vacation.
How To Fight Back After Bankruptcy (11)
In fact it is one of the most terrible phases of life one can go through. But the only good thing about it is that after you are through the period of bankruptcy you start with a clean slate.
Credit Counseling: The Basics (12)
The creditors opt for this because they get their capital back with some interest and they don't have to go to the court and drag the matter on. Find more Online Education info @ www.CREDIT-COUNSELLING4U.INFO and @ www.CREDIT-HELP-NOW.INFO For spyware related articles: www.spyware-fyi.info
What Makes A Gas Rewards Card Worthwhile? (13)
The exact rate may vary by how much you use your credit card. You also need to be aware of card maximums for rewards. If you are a big spender you may find that you come up against your rewards limits.
6 Ways To Save Money When You Eat Out (14)
You can get Biblical tips on health, finance, relationships, parenting, and success, delivered to your email inbox every week. Simply visit www.wisdomsedge.com and sign up for this free e-zine.
Know Your Options For Student Loans (15)
The basic difference between a subsidized student loan and one that is not, is that the subsidized loan will be awarded to students in financially challenged situations. A student that gets a non subsidized loan will be required to have some basic standards as far as credit and income goes.
Get A Competitive Advantage By Leasing Equipment (16)
These savings by the leasing company are oftentimes passed on to your customers. A vendor leasing program also promotes both referrals and repeat business. You've eliminated a major burden for the customer: how to finance the equipment.
Thinking About Living In New York City? (17)
There are some excellent opportunities here and certainly potential to move up the corporate ladder. New York earned the term "The Big Apple" by a touring jazz musician in the 1930's.
Muddling Through Multiple Loans (18)
Debt consolidation does much to ease these troubles by merging the many miscellaneous loans to form a single one that charges a single rate of interest. It is for these reasons that debt consolidation is becoming so popular.
Learn The Warning Signs And Avoid Predatory Lenders (19)
Keywords: predatory mortgage lending , mortgage lending , mortgage lender Purchasing a new home is everyone's dream and goal in life. Being able to provide a good home for the family brings such joy and fulfillment.
Piggy Banking For Adults (20)
Coins and notes that met us along the road also found their way into the piggy banks. After days and days, only when the piggy bank got heavy, did we finally decide to smash it.
Newer Articles Highlighter:
How To Save Up To 90% On Title Insurance (1)
Whenever title passes, the seller usually gives a deed containing certain guarantees or "warranties" (hence the name "Warranty Deed"). The seller warrants that title is good, that is, no one will come challenge the integrity of the title.
Is Preparing Your Tax Return Online Safe? (2)
But if you are the type who is even afraid to give out your credit card number on some shopping site shouldn't you be scared to give out more information about you such as your social security number, your income, source of interest, dividends, investments, your job data, information about your spouse, children, etc.
Stop, Look, And Listen - That's How You Apply For A Credit Card The Right Way (3)
At this point, you must ensure that you possess the best credit rating possible to have higher chances of getting approved for a credit card. You need to conduct some research about the credit card companies that offer the best APR or the annual percentage rate as well as bonus programs.
Newer Approaches To Payment (4)
When you were paying in cash, the seller was immediately paid for his wares. He did not have to worry about when the payment would come through. Before credit cards gained in popularity, check payment was the preferred mode of payment when it came to larger sums of money.
The High Price Of Gas And The Evil Oil Companies (5)
After all, we have set the standard in the world for capitalistic excellence. That is why they hate us. They are jealous of us. We have everything so they want to see us become poor, miserable, hateful, vengeful, useless slobs just like they are.
Online Trading: Abuse Of The Internet (6)
Nothing. But one must also understand that the internet has also opened up great avenues for scams to be carried out. The main reasons for internet being such a hit with frauds and tricksters are its ability to reach millions of people at one go and the ease with which one can hide his or her identity behind the worldwide web.
Buying Property Abroad Need Not Be A Pain In The Balearics (7)
Keywords: Mallorca, Property, Sales, Agents, Estate, Villas, Apartments, Town, Houses, Balearic, Islands Mallorca or Maiorica meaning Major Island as it was previously known has been a sort after tourist destination for many years, being one of the first places in Spain to offer package holidays as the popularity for holidaying abroad became affordable to all.
System Trading: The Future Of Online Trading (8)
Keywords: capital markets, brokers, trading, online trading As the communication technology has improved, especially the internet, many new avenues have opened for all of us. One of the many new things that we can do now is trade on the capital markets.
The Correct Student Loan Might Help Avoid Debt Consolidation Financing In The Future (9)
Regrettably, there is no simple way to finance today's high cost of education, however doing the essential homework to consider all options will save all involved time and headache in the long run.
Bank 'May' Increase Interest Rates (10)
Keywords: bank, of, england, set, to, increase, base, rate The Bank of England could be set to increase the base rate next week, it has been suggested. According to the Chartered Institute of Purchasing and Supply/NTC purchasing managers' index (PMI), manufacturing output grew to 55.7 over the course of July, up by one point from the previous month's figures and the highest level recorded since July 2004.
The Pros And Cons Of Online Trading (11)
Keywords: online trading, pros, cons, stock Online trading has gained immense popularity and the reasons for that are simple. First of all, it is convenient and easy. You don't have to leave your room.
Confidence 'Unrattled' But Brits Reported To Face 'Tough Times Ahead' (12)
But it is comforting to see that consumer sentiment about the employment situation is holding up". The index also revealed that the public's expectations for house price growth slowed over the course of the month.
What Is So Great About Online Investing? (13)
Next comes gathering information about the market which can only be achieved by making innumerable phone calls, being hooked on to the television business shows, read the business papers and magazines and also take help of the internet.
The Essence Of Online Trading (14)
What you can do is to see the time-lag is kept to a minimum. That would be possible if you have the best set-up in place and your trading firm provides its subscribers with the best service.
The Options For Credit Repair (15)
And the loan comes with a moderate rate of interest, much lower than what you pay on your dues on a credit card. Also personal loans don't require you to provide any security.
Online Trading: The Tools You Need (16)
With so much traffic these days, a dial-up connection just wouldn't work. Software The hardware and the net connection will be put to full use with the back-up of a great software platform.
Things To Follow After You Emerge Out Of A Debt Trap (17)
All we can ask for is some support and some guidance. When some of us are deep in debt those are the two things that we definitely need-guidance and support.
What Do You Need For Online Trading (18)
Ideally it should be 2 GB or more. The hard disk should also have plenty of space. Go for at least 100 GB of HDD space. To place your orders and get instant processing you will have to have a broadband connection or you just wouldn't be able to get the rates you are looking for.
Risks Of Online Trading (19)
Exactly the way you do. So this hacker is most likely to sell all the shares that you have accumulated, and with the money he thus receives will but shares on micro-caps.
Forex Trading - How To Read Forex Quotes (20)
With the bid/ask spread added to the above example, it looks like this: EUR/USD = 1.2526/1.2528 Simplified, it looks like this: EUR/USD = 1.2526/8 Brokers make their money when they sell currencies for slightly more than they buy them.
Permalink to One Of The Few Loans We Do Recommend — But Only If You Follow These Simple Rules