Some financial advisers have been urging clients to remove the equity in their homes. They claim that access to equity will be a financial boon in the troubled times to come. The Pittsburgh Post-Gazette reports: “When done correctly, it is not only a way to preserve net worth you already have, but also build wealth,” said [...] [...more]
Earlier today, Wachovia announced that it will be freezing HELOC lines for many current customers. Market Watch reports: “Wachovia Corp. said on Monday that it’s limiting homeowners’ ability to tap home equity lines of credit that they haven’t used yet as the giant bank tries to cut its exposure to the broadening housing crisis. [...] [...more]
Choosing a HELOC can be difficult. When speaking with HELOC lenders you may receive so many different terms and rates that it becomes practically impossible to keep track. This chart can help. Use it to organize the HELOC information lenders give you. By the time you’re finished speaking with three lenders, you’ll be able to [...] [...more]
In many large cities, home values are dropping rapidly. A recent Wall Street Journal article reports that homeowners are responding to tougher times by relying on their credit cards and home equity lines of credit (HELOCs): “While tighter lending standards have cut off all but the most credit-worthy borrowers from auto loans and home loans, many [...] [...more]
Several borrowers are reporting that Washington Mutual (WaMu) is still sending out HELOC freeze and reduction notices. A Los Angeles Times blog gives this account: “Last week a Realtor in San Diego wrote, ‘Just after I made a large payment of $10K (only $350 payment was due), they took away all of my credit line. [...] [...more]
Some HELOC customers routinely overpay their HELOC balance. For example, they pay back $550 when $548.83 is due. Although overpaying can make it easier to balance financial records, it’s generally a bad idea. Usually, HELOC lenders will keep the positive balance on the books and credit the borrower the next time money is owed. However, if [...] [...more]
Most HELOC loans have an adjustable interest rate tied to the prime rate. Your total interest = the current prime rate + your margin (the markup the lender assigned you in the loan paperwork). Keeping track of the prime rate can help you decide when to withdraw money and estimate how much your monthly interest payment [...] [...more]
Homeowners have two major home equity borrowing options: the home equity loan and the home equity line of credit (HELOC). Both options allow homeowners to take out a loan based on the existing equity in their properties. In both cases, the property is used as collateral and may be foreclosed upon should the borrower [...] [...more]
Earlier today, Market Watch reported that six banks may lose a whopping $50 billion on home equity loans by the end of June. Declining real estate markets mean many HELOC / home equity loan customers now owe more than they can generate via selling their properties. Which banks are hit hardest? “Analysts slashed estimates for Merrill Lynch, [...] [...more]
One of the advantages of borrowing money through a HELOC is the possibility of deducting interest from your taxes. This article explains the basics of taking a HELOC tax deduction. How much HELOC interest can I deduct? To put it simply: If your HELOC was used to improve your home, you may deduct interest on lines up [...] [...more]
