You are currently browsing comments. If you would like to return to the full story, you can read the full entry here: “When is the right time for a home equity loan?”.
-
Archives
- March 2012
- February 2012
- January 2012
- December 2011
- November 2011
- October 2011
- September 2011
- August 2011
- July 2011
- June 2011
- May 2011
- April 2011
- March 2011
- February 2011
- January 2011
- December 2010
- November 2010
- October 2010
- September 2010
- August 2010
- July 2010
- June 2010
- May 2010
- April 2010
- March 2010
- February 2010
- January 2010
- December 2009
- November 2009
- October 2009
- September 2009
- August 2009
- May 2009
- April 2009
- March 2009
- February 2009
- January 2009
- December 2008
-
Resources
-
Meta
ZACHERY
Instead of taking a loan set up a Home equity line of credit.
It is a line of credit based on the equity you have in your house. As needed you can ask for funds from the line of credit. You then pay a monthly payment based on how much you owe.
It’s kind of like a credit card except the interest is tax deductible. The interest rate may move up and down slightly. It’s a nice emergency back up plan when needed.
STEWART
Kae… Please be VERY CAREFUL!!! The real estate market is very bad right now all over the USA. Home values are way down and there is no guarantee that they will stabilize or that the value of your home will maintain the increase that you say you have. If you take out a loan and the value of your house goes below what you owe, it will be very hard to make it up. A loan is a loan is a loan… you WILL have to pay at some point.
You SHOULD open what’s called a “Home Equity Line of Credit” which can help in case you have emergencies, but it is not wise to use the equity in your house right now because of the market dip. Go ahead and update your house, but do it as you can afford it and pay with money you already saved up.
It would be fun to spend money, but it isn’t free. I just wouldn’t do it right now. Sorry.
Good Luck!
MATTHEW
I believe that a home equity line of credit is going to be the better option. Yes, the rate is variable, however, you will only pay against the amount you use (you might need $1,000 here, $10,000 there). Furthermore, the home equity line of credit rates are actually lower than the fixed home equity loan rates.
As far as equity, you shouldn’t want to exceed more than 85% of your homes value (minus the first mortgage you have currently). With the declining market, you are providing yourself a built in cushion in case your home value decreases. Never put your self neck high in mortgage or home equity deals. You need that additional equity in the event of an emergency.
The new loan will be a completely different payment. Your current mortgage will remain as is and a new lien will be placed on title. So you will end up making two payments monthly.