Home Loans

Home Loans piggy bankA home loan is in essence a mortgage, through which property can be purchased and paid for over the course of a pre-determined time frame. In this expensive, consumer driven time that we are living, mortgages can allow for a certain degree of elasticity in your wallet. That is to say that it can help you stretch out the money that you have, and account for the money that you someday expect to have. There are those amongst us who have the money to purchase a property outright, avoiding the compiling interest costs associated with a home loan, however, such fortunate souls are few and far between. The rest of us are required to get a mortgage that allows the price of the property to be broken up into more reasonable figures that can be dealt with on a month-to-month basis.

There is a great deal of responsibility that comes with the territory of becoming a homeowner. You must pay close attention to the current rates and look to refinance your mortgage when it can save you a great deal of money. Another, more basic responsibility, comes with the upkeep of the home itself. Over time, homeowners are going to need to make repairs, renovations, adjustments, improvements, or additions to their ageing property. Home equity is designed specifically for such a purpose. Home improvements are usually costly to the point that it no longer makes economical sense to use a simple credit card or personal loan to finance the work. Through utilization of your property’s equity, you can receive a percentage from your creditor through which they can make the necessary home improvements or additions. To a certain extent, equity loans are also deductible from Federal Income Tax. For expensive improvements, a home equity loan is the smart choice for the savvy borrower.

Throughout the history of mankind, there have been those who have sought to beat “time,” so that they might live forever. Whether it be the Holy Grail or the Fountain of Youth, there have always existed those with a desire to taste eternity. The truth of the matter is, nothing can withstand “time.”An equity loan exists for the purpose of combating the damages that “time” inevitably unleashes upon your home. Home improvements are unavoidable and can often times leave a large hole in your wallet. For those jobs that do require a large sum of money, home equity loans offer a logical, workable solution. Equity simply sits throughout the home untouched until the home is sold. Therefore, tapping into this line of credit simply makes sense, especially considering that the improvements are only going to increase the value of the home.

Equity can be easily broken down as the difference between the remaining balance of your mortgage and the appraised value of your home. So, if you have $50,000 remaining on your mortgage and the appraised value of your home is $100,000, then there is $50,000 in equity. A percentage of that $50,000, usually 80%, sometimes as high as 90%, would then be offered by the lender/creditor. Another positive externality associated with equity is that the interest payments made on the equity are deductible on Federal Income Taxes. (This is only to a certain extent however) A home equity loan is simply a smart solution to financing home improvement.

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