Credit Equity Equity Home Home Line Loan

Would a Home Equity Line of Credit or loan used to buy a home be considered a Home Aquisition Debt instead of a Home Equity Debt?

For HELO interest on principal beyond $100k to be deductible, the proceeds must be plowed back into the property pledged as security. If it's used for any other purpose, the interest on the amount of the loan over $100k is non-deductible. To be considered as acquisition debt, the property acquired must be the security for the loan.

2008-05-31 01:18:06 by Evan

A home equity loan and a home equity line of credit both provide money from the value of your home. But each one has its pros and cons.

I'm thinking about applying for a home equity loan or line of credit for my home but am discouraged by my below average credit score. To refinance, any and all applicants must also be on the title document, so would the same rules apply on a home equity loan or line of credit?

Anyone cosigning for something such as that would have to be on the deed to qualify. Otherwise is is not a home equity loan but a personal loan.

2007-10-08 19:02:26 by pingkitoe

Price: $0.99

A baby boy recently entered our lives and prior to his birth, we had a bit of credit card debt that should have been taken care of but wasn't. My wife is now working part-time instead of full-time, which has been really rough. Our debt is not getting any better.

We borrowed money from immediate family to purchase our home so the loan is a low APR and is not technically on our credit. We still need to consolidate our debt (credit cards, vehicle loans, etc...) but not sure what route to take. It sounds like a Home Equity Loan is the best choice since the APR is usually fixed and is like a typcial loan.

Do you have any suggestions for us? We do not want to damage our credit so we need to make the best choice.

Thanks!

Well, home equity loans vs lines of credit are typically fixed. The APR will definitely save you money on a home equity loan vs your credit cards. I would just make sure the costs to do your loan are minimum to none, otherwise, if it costs you a couple thousand or more, then your not really doing yourselves any favors in the short term. Companies like BofA and Countrywide are offering zero closing cost products and are highly competitive so you may want to start there. Also, you may want to consider paying your mortgage once every 2 weeks by splitting your regular mortgage in half and sending in each half amount on the 2 week mark. Once you refinance or if you refinance, you might want to get the new mortgage oo both mortgages set up in this way. One last thought on the subject - if you have a low and better interest rate on your primary mortgage (than what you can get in today's market), don't refinance for a higher rate. Take out a second mortgage instead. Good luck!

2007-04-26 07:18:34 by to_the_hurricave

Price: $5.95

I have a mortgage of 200K.I have a first mortgage of 160K at a fixed rate of 5.785% over 30yrs. and the 2nd one's 40K at 9.00% fixed.Now,the value of my place went up to about 350K in the last 4 years.Should I stay with my current plan or should I re-finance? And if I do,which way should I go? Home Equity loan or Home Equity line?

With $160k @ 5.785% and $40k @ 9.00% fixed, your blended rate is 6.428%. So if you were to refinance both mortgages, you should look for a rate that is lower than that. If you were to refinance just your 2nd mortgage, you should look for a rate that is lower than 9%.

If you were to refinance both mortgages, you wouldn't get either a Home Equity Loan (HEL) or a Home Equity Line of Credit (HELOC). You would get a new first mortgage, that would replace both of your current mortgages.

If you just want to refinance your 2nd mortgage, you could go with either an HEL or a HELOC.

HELs are generally fixed rate mortgages, like your current 2nd mortgage. They are for a single amount, and cannot be borrowed from again.

HELOCs are lines of credit that usually have variable rates, often based on the prime rate (i.e. prime + 1). For the first 5 - 10 years, you can borrow money agains the HELOC, often just by writing a check or using a debit card. During the time that you can take additional money out of the HELOC, you usually only have to pay the interest on the money that you have borrowed. Once you can no longer borrow money, the loan payment schedule will reset and you will have to start paying back principal, as well as interest. This can cause your payment to go up significantly.

Which type of loan you should get, or if you should stick with your current loan structure really depends on what you are trying to do. Would you rather have one loan or two? Would you rather be able to draw money out if you need to, or not?

2007-07-11 16:40:24 by Spaghetti

We need to get access to $30,000, but not sure of the exact amount.
Would it be enough to have the home equity line of credit?

A home equity loan you get all the money up front. A home equity line of credit you have the money available and can use it as needed. With a loan you pay interest on the whole amount. With a line of credit you pay interest only on the amount that you have used.

2009-10-06 09:10:01 by Heidi