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How does a home equity loan work?
I need to know all the details and if it is a good choice. I have payed off my vehicle and credit cards and have none, but I have alot of student loan debt. Our dilema are the student loans. And paying them. I have heard about home equity loans and heard about being tax deductible. How do they work? Do they look bad on your credit? How much can you borrow ? Does it add to the years to pay off your house? We only have eleven years left to pay as it is right now. Just wondering what is a good option. I even thought that after I graduate and am working that my pay checks can go all to my student loans. I am just looking for some good ideas without having to stress out about debt and bills and such. We are trying to pay our bills off and so far have done good. But those student loans are looming in the background.
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| By
newmoon |
Posted on
03/19/07 Total Answers
5 |
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| Answers- |
| a home equity loan is a loan tha you can borrow from. its just like a second mortgage. yes it will add to how much longer you will own you home. you can borrow the difference in how much left you have to pay on your home and what you already paid. shot me an email if you would like me to help you get this loan. depending on what state you live in. |
| Answer by :
cmruffin1 On Date
2007-03-19 13:18:32 |
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| I'm not sure why you would want to get a home equity loan to pay off student loans. Typically interest rates on student loans are much lower than home equity loans. It is true that you can use interest paid on a home equity loan as a tax deduction, but you can also use interest paid on student loans as a deduction. |
| Answer by :
PCL-R On Date
2007-03-19 13:25:37 |
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| Pulling equity out of your house does not sound like a good option to refinance your student loans. You said you are trying to pay your bills off, what you will actually be doing is trading out student loan debt for home equity debt, which is a bad trade off and is not paying off your bills since you won't be reducing your debt. Most likely the student loans will carry a lower interest rate than the home equity loan, but more importantly, if you can't afford to make student loan payments at some point in your life your lender will work with you because it is unsecured debt. If you fall on hard times and can't pay your ORIGINAL purchase money mortgage, the lender can foreclose on your home since that was the collateral but (in most cases) can't come after your other assets. When you refinance your home, pull equity out of your home, or accrue any non-purchase money debt against your home you are exposing the rest of your assets to your lender. If you elect to do what you suggest and you are unable to make payments at some point in your life, your lender can come after all of your assets as opposed to none, with the student loan.
Also, student loan interest is tax deductible. |
| Answer by :
Chris M On Date
2007-03-19 13:26:35 |
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| If you have equity in your house, you could refinance, or you could take out a home equity line of credit. You may get a better rate on the refinance, but the home equity line of credit is an entirely different loan, and will not affect when you have your house paid off. I specialize in both of these loans, and either one is effevtive for consolidation of debt. Shoot me an email, and I'll poimt you in the right direction.
msmith@premierloangroup.com
Marty |
| Answer by :
Marty S On Date
2007-03-19 13:30:45 |
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| Like any other type of loan, there are some factors you should look into carefully in the bad credit home equity loan. Check out the interest rates and conditions of the loan before taking any decision. Most of the times, they are not borrower-friendly like those for the good credit costumers. But this is due to the fact that bad credit home equity loan companies take on more risk by lending to persons with bad credit and they want to compensate their risk. When you shop around for the rates, you can get a better rate, though not as good as the rate for the good credit customers.
The loan conditions and the credit rate depend on the credit reports and other financial statistics. You get a number between 300 and 900 that denotes your credit rating. This number is used to give the terms for your home equity loan. If your credit rating is at least 600, you can get the home equity loan easily. But if it is below 600, you should apply for a bad credit home equity loan and you should negotiate the best possible deal you can afford. But you can help yourself by paying the installments within the specified time. |
| Answer by :
mey t On Date
2007-03-20 04:43:57 |
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