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]
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]
If the property used to secure your HELOC is your primary residence, the federal Truth in Lending Act gives you 3 days from the day the line was opened to cancel (or “rescindâ€). Should you choose to rescind, the HELOC lender must return all fees including third party charges such as the appraisal. The [...] [...more]
A HELOC can be a smart way for some homeowners to fund home improvement projects or pay for emergency expenses. On the pro side, HELOCs offer: - lower interest rates than most credit cards - high limits - low fees - tax-deductible interest But, there are some downsides to borrowing money with a HELOC. On the con side, HELOCs tend [...] [...more]
Some borrowers mistakenly believe that federal rate cuts have a direct affect on their HELOC interest payments. In reality, federal rate cuts are a move by the government meant to promote economic stimulus. These federal cuts may act as an incentive for banks to lower their own interest rates, but this is not always the [...] [...more]
Under the federal Truth in Lending Act, a HELOC consumer is granted certain rights. Most importantly, you have the right to be given information about your HELOC before agreeing to the loan or paying any fees. You also have the right to cancel your home equity line of credit within a specified time frame. This article [...] [...more]
If you can no longer pay your first mortgage, your HELOC lender may be able to recoup some of their money via short sale or foreclosure. However, it’s rarely as simple as “turning in the keys.†This in-depth article explores the financial consequences of HELOC foreclosures and short sales. It also analyzes five possible scenarios for [...] [...more]
If a borrower does not qualify for a HELOC on his own, he may still be approved for the home equity loan if he has a co-signer. A co-signer is a more creditworthy person who essentially vouches for the primary borrower. By co-signing for a HELOC loan, you are saying: “If the borrower does not [...] [...more]
One of the best aspects of a home equity line of credit (HELOC), is that the interest is often tax deductible. Because a HELOC is technically considered a home loan, most state and federal governments allow borrowers to deduct a significant portion of the interest they pay. Townhall.com classifies HELOCs as a type of “good debt,” [...] [...more]
