Are you looking to raise funds to meet crucial commitments or for renovating your home? Are some major expenses looming large? Then, taking a home equity loan might serve your purpose. Based on the quantum of funds and the duration you need them, you can go in for a home equity loan that best suits your requirements.
Home Equity Loans do not cause a heavy burden on you as interest rates are mostly very low. You may choose either a fixed or adjustable rate loan. It would make sense to go for a home equity loan if the need is a major expense.
Get All Those Missed Out Features
Utilizing funds borrowed through Home Equity Loan, carry out repairs, remodel your kitchen, bathrooms or any other area, and make structural alterations, if any, to give that stunning look to your primary home. However, while planning these, ensure your property will still command the rate that is prevalent in the neighborhood.
Reap Solid Gains on Investments
Since costs are relatively low, a daring home-owner can consider investing some funds in equity or commodity markets. However, keep in mind that investing in stocks or commodities is quite risky and may not always turn out to be a good ploy. There is no fun in losing borrowed money and thus getting into a bigger debt trap.
Meet Educational Expenses
Besides regular expenses, funds are required to pursue higher education, either your own or that of some near ones. At times when the regular stream of income is disturbed for whatsoever reason or when expenses tend to rise disproportionate to the rise in income, going for a home equity loan makes sense. An exception could be the likelihood of you or your kids qualifying for a low-interest federal student loan.
Settle Existing Debt
The burden of making monthly repayments of loans on your vehicles, personal loans, and settlement of credit card bills may turn out to be unbearable at times, especially if there is a reduction in salary or loss of employment. Here, a Home Equity Loan can turn out to be your savior as the interest you will pay on home equity loan is much less than the interest on personal or vehicle loans.
Raise Funds for Second Home
When your credit score is good and the existing home commands good value as collateral, a home equity loan is a better option than going in for another mortgage. Assuming your primary home is worth $500,000 and the outstanding mortgage on it is $300,000, you can still get around $160,000 – $170,000 (80% – 85%) as equity loan for your second home.
There are benefits such as nil closing costs, tax-deductibility, and prospects of getting rental income in case you are not using the second home as a vacation property.
Call …….. for an insight into what a Home Equity Loan is all about and how it can help you meet your financial obligations.
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