Interest Rates For Home Equity Lines Of Credit  

If you are in need of money and have managed to build equity in your house, then you can opt for home equity line of credit. Generally, this form of credit allows a person to borrow large sums of cash at reasonable interest rate by putting the equity as collateral. Also, in this case the line of credit is not taken as an income and the person does not have to pay income tax on it. However, the interest paid, can be deducted from the taxable income.

Taking home equity line of credit is slight risky. If a person fails to pay the line of credit on time, this could put the house at risk of being foreclosed. And, if you decide to sell the house to clear the debt, then most of the money that you get from the sale will go in repaying the line of credit. But, at the same time, equity allows a person to borrow money easily as the rules are not that stringent as long as the person has sufficient equity in their name.

Interest rates for home equity lines of credit are dependent on the prime rates. The lender will look at the prime rate and accordingly levy the interest rate. So, if the prime rate is high, the rate of interest will also be high. The opposite is true if the prime rate is low. That is why it is important to go for home equity line of credit when the prime rates are low. Alternatively, you can look for a lender who follows LIBOR rates. This is the UK version of the prime rates existent in the US. It has been seen that when the prime rates are high, LIBOR rates are low.

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Interest Rates For Home Equity Lines Of Credit

 

 

    
 

Real Estate 101 :

Opinions On Home Equity Line Of Credit      Home equity line of credit is also known as HELOC for short. It is a kind of credit that is given out to people who have managed to build equity on their homes. Equity is nothing the total value of a house less the mortgage or debts on it. This kind of credit is quite similar to the credit given for credit cards. When a person has equity, he or she is given up to a certain amount based on the equity. Then the person can draw from that amount as and when the need arises. More..

 


 

 

 
   
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Interest Rates For Home Equity Lines Of Credit )
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