52 Simple Ways to Manage Your Money – 38. Here’s An Angle – Home Equity Loans
What it Is…
Borrowing money using the equity in your home as the basis for the Ioan.
Interest rate is variable.
How it helps …
Interest paid is tax deductible.
Makes use of the equity in your home.
Generally, a home equity loan can be prepaid without penalty.
Relatively easy method of acquiring money.
How it hurts…
Increases the mortgage on your home.
Increases your monthly debt load.
Interest rate is variable and can go up.
Loans are often interest-only.
Key items to look for…
Competitive interest rates.
Annual fee, if any.
The terms of the loan.
Several hours to shop for conditions and loans.
Keys to action …
Review your goals and objectives.
Determine the amount of money needed.
Determine your method of repaying the loan.
Evaluate other methods of acquiring money.
Shop for terms and conditions.
Complete the application provided by the lender. Allow time for paperwork.
SET IT UP
Check the reason why you need the money.
STEP ON IT
Is that reason worth taking on new debt?
STEP ON IT +
Set a limit before you start.
Your reaction to acquiring new debt.
Your reaction to using your home as collateral for the debt.
Your credit history.
The good thing about getting more money…
If it turns out that my house is on the line.. .
Increasing my monthly payments makes me…
If I had to pay off this loan sooner than expected…
If the money is easy for me to get, I might…
Using this money responsibly means…