These strategies may destroy your budget to pay the first mortgage, if not your payments on a Home Equity Loan
. Do not do anything for you must determine when is the right time to refinance your mortgage.
In general, home equity loans
represent borrowings other than the indebtedness incurred in acquiring a principal residence and/or a second home.
They take many forms, the most common being home equity loans
, home equity lines of credit, "cash out" home refinancing, student loan consolidation programs, and personal loans through financier institutions,
HOEPA applies to closed-end home equity loans
, excluding home purchase loans and reverse mortgage loans, that bear rates or fees above a specified percentage or amount.
A word of caution, however: Home equity loans
and lines of credit put your home on the line.
At this higher income level, "A" is restricted to claiming the standard deduction on his tax return, thereby losing any previous benefit, however small, associated with the interest paid on an acquisition debt or a home equity loan
. "B," on the other hand, loses only a portion of the excess itemized deductions, but the disallowance of $4,247 decreases the tax savings associated with the interest paid.
Loans secred by a principal residence, including first and second mortgages home equity loans
, and refinanced mortgages are includable in the definition of mortgage interest.
This question is particularly significant because home equity loan
rates are adjustable.
Synopsis: Home equity borrowing has grown rapidly during recent years, with one in four homeowners reporting they have both a first mortgage and a home equity loan
or line in a new Experian/Gallup poll.
A 0% credit card rate is far better than a 12% home equity loan
. You must do the math," says Scott Bilker, founder of DebtSmart.com and author of Credit Card and Debt Management (Press One Pub; $19.95).
If you're interested in finding out how a home equity loan
or line of credit can work for you, call the NEA Home Financing Program at 1-800-NEA-4-YOU (1-800-632-4968).