Home Equity Line of Credit - Great Idea for Rainy Day EmergenciesMost Americans tend to live on a paycheck-to-paycheck basis, and the typical household has nearly $10,000 in credit card debt. Adding to that is the fact that Americans are saving money at the lowest rate in history. We spend what we earn, when we earn it, and there's little or nothing available when a disaster or an emergency strikes. How can the average American make sure there will be money available for that "rainy day" emergency? One possible solution would be to open a home equity line of credit. The equity in a home is the difference between the value of the home in the market and the amount owed on the mortgage. Rising real estate prices across the country have left Americans with record amounts of home equity, and record numbers of homeowners are borrowing against the equity in their home. There are two main types of home equity loans; the traditional loan and the line of credit. The traditional loan lends a fixed amount of money that is repaid at a fixed interest rate over a fixed amount of time. This is ideal when the money is borrowed for a specific purpose, such as a home-remodeling project. The home equity line of credit, on the other hand, gives the borrower great flexibility. The amount of money is capped at a certain amount, but the borrower writes checks to use the money when they need it. The borrower only makes payments when he or she actually writes a check to use some of the money, and the interest rate on the loan is adjustable. The line of credit is the perfect source of funds for that "rainy day" emergency. The costs of obtaining a line of credit are minimal, and the paperwork is much less involved than the paperwork associated with obtaining a primary mortgage. The beauty of a line of credit is that there are no additional costs if the money isn't used. The homeowner is under no obligation to use any of the money, but he or she can simply sleep soundly, knowing that it is available should an emergency arise in the future. Americans, as a group, tend not to save much of what they earn. But even poor savers who own their own homes can prepare themselves for unexpected financial emergencies by taking out a home equity line of credit. One never knows when an emergency will strike, but it is always a good idea to be prepared to face one. ©Copyright 2005 by Retro Marketing. Charles Essmeier is the owner of Retro Marketing, a firm devoted to informational Websites, including End-Your-Debt.com, a Website devoted to debt consolidation information and HomeEquityHelp.net, a site devoted to information on home equity loans.
MORE RESOURCES updated Fri. April / 19 / 2024 280 Park Ave.'s owners refinance mortgage and pay down debt Crain's New York Business Mortgage Interest Rates Today, April 19, 2024 | High Rates Make for a Challenging Homebuying Season Business Insider Bank of Montreal Provides $117M to Chetrits to Refinance Harlem Tower Commercial Observer How To Get A Home Equity Loan With Bad Credit Bankrate.com How to Refinance Your Mortgage NerdWallet Average Mortgage Interest Rates: Mortgage Rates by Credit Score, Year, and Loan Type Business Insider 15-Year Mortgage Refinance Rates: Compare Current Rates Business Insider 30-Year Mortgage Refinance Rates Business Insider Loan Modification Vs. Refinance Bankrate.com Types of Mortgage Refinance Options Bankrate.com With property values strong in 2023, many homeowners tapped home equity lines of credit, pushing total HELOC ... Miami Herald How To Get The Best Refinance Rate Bankrate.com Mortgage Interest Rates Today, April 16, 2024 | Rates Remain Elevated After Last Week's Spike Business Insider The best mortgage lenders for refinancing in April 2024 CNN Underscored Mortgage Interest Rates Today, April 15, 2024 | Rates Are High, But They Still Could Drop This Year Business Insider Best Mortgage Refinance Lenders of April 2024 Business Insider How To Refinance A Rental House Bankrate.com Bain Proposes Japan's Kioxia IPO to Clear $5.8 Billion Loan Refinance U.S. News & World Report Current mortgage refinance rates CNN Underscored Best Mortgage Refinance Lenders In 2024 Bankrate.com Mortgage Refinance Rates: Compare Current Rates Business Insider MBA: Mortgage Applications Increased in Weekly Survey Calculated Risk Mortgage Rates Chart | Historical and Current Rate Trends The Mortgage Reports When to Consider Refinancing Your Mortgage Business Insider Mortgage Rate Forecast April 2024 Bankrate.com 30-year refinance rates: What to know CNN Underscored Refinance Requirements: What You Need to Refinance Your Home in 2024 The Mortgage Reports Cash-Out Refinancing: How It Works, When To Do It Bankrate.com Current 15-year refinance rates — and lenders that offer them CNN Underscored Mortgage Rate History: 1970s to 2024 Bankrate.com Mortgage Interest Rates Today, April 14, 2024 | Will Rates Still Go Down This Year? Business Insider How To Refinance An Underwater Mortgage Bankrate.com How Soon Can You Refinance a Mortgage? NerdWallet Should You Refinance Your Mortgage In 2024? Bankrate.com Conventional Refinance Rates and Guidelines for 2024 The Mortgage Reports Refinancing a Home Equity Loan (2024 Guide) MarketWatch Will Mortgage Rates Go Down in 2024? What Homebuyers Should Expect Business Insider When to Refinance Mortgage: Is it Time? - Buy Side from WSJ The Wall Street Journal Best Refinance Lenders of April 2024: Refinance Your Mortgage The Motley Fool Pros and Cons of a Cash-Out Refinance Bankrate.com Should I Refinance My Mortgage Now? When to Refinance As Rates Drop Business Insider What Credit Score Do I Need To Refinance? Bankrate.com Office of Research blog: A look at cash-out refinance mortgages and their borrowers between 2013 to 2023 Consumer Financial Protection Bureau
|