3 Things to Understand about Home Equity Loans

There are a few important things you should know about home equity loans before you agree to one. Home equity loans can help you access money when you need it. You can use the money to consolidate debt, add value to your home and do many other things as well.

1. Use Instead of Refinancing

If you are considering refinancing, you might want to look at a home equity loan first. With a home equity loan, you do not have to restart your 30-year repayment period or give up a good interest rate. If you take an equity loan, you can repay that loan over time and never have to change your current mortgage.

2. Tax Deductibility

A great feature of home equity loans is the deductibility of the interest. When you have a home equity loan and you itemize your yearly deductions, you can deduct the interest from the loan. This can amount to a large deduction at the end of a tax year.

3. Short Terms

Home equity loans are not considered long-term loans, in most cases. Many home equity loans are for a period of 10 years. Keep in mind that you should always read your agreement so that you completely understand all of the terms of your equity loan.

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