Borrowing from your home's equity
This section discusses home equity loans and lines of credit. It's important that you learn about the various financing options, tax advantages and how to shop for the best loan for your needs.
Home equity loans and lines of credit are increasingly becoming the debt of choice for big-ticket purchases, such as home improvements, college tuition, new cars and even paying off other debt. The primary reason seems to be that the interest on most home equity loans is fully deductible on your tax return while interest on other forms of consumer debt is not. Of course, the rate charged may often be better than other loans or credit cards, and it's often easier to qualify for the loan since your using you're using your home's equity as collateral.
Responding to this increased demand, banks are offering a wide array of enticing options to make it easier for homeowners to borrow their equity. Follow the links below to learn what you need to know before taking out a home equity loan or line of credit.
Depending on how much you are borrowing, how much equity you have in your home, and the terms that you can get, it might be more advantageous to consider refinancing your mortgage with what's called a "cash-back" option. This allows you to potentially get the cash you need and structure a new mortgage with payments close to what you currently pay.