This is the last part on home equity loans. In this article we will be discussing about the advantages and disadvantages of acquiring a home equity loan. First, lets talk about the advantages a home equity loans brings you, and comes with. Now, a lower interest and rate and tax deductions are always the best advantage when comparing home equity loans and types of debt. The other advantage is that since you are putting up your home as collateral, it places less risk on the lender. Now, no matter what type of home equity loan you take, the immediate $100,000 you borrow in tax deductible. Other non-secured loans and credit cards do not come with this amazing feature. IE: Lets say you end up paying $10,000 in interest towards your home equity loan, at the end of the year you will reduce your taxable income by $10,000. This ratio will change, depending on what you use your home equity loan for. If the purpose of the home equity loan was to renovate or by a new home, this means you will have the benefit to deduct the interest paid on the first $1,000,000. This is due to the fact that these types of loans are recognized as a first mortgage, and are taken as tax purposes. However, your tax advisor will be much of a bigger help when answering questions pertaining to your situation.

The major disadvantage is that your home is on the border line, you may lose your home in the case you default on the payments. When you get a home equity loan, you are reducing your ownership ratio towards your home. There are also fee’s which you pay when getting a home equity loan, these are similar to those you paid when you bought your home.

4 Comments »

1. 

   Home Equity Loans - The Basics - Part 3 | MortgageTonight.Com…

   By reading this article you will understand the advantages and disadvantages of getting a home equity loan. This article is unique, and it only found on http://www.mortgagetonight.com - UNIQUE CONTENT!…

   Trackback by linkpusher.com — December 28, 2008 @ 12:29 am

2. 

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   Pingback by Home Equity Loans - The Basics - Part 3 | kozmom — December 28, 2008 @ 12:46 am

3. 

   Hey

   I read all three parts of the home equity loan package. Great information, really worth the read! I learned quite a lot by coming to this site.

   keep up the good work

   Comment by Richard C. — December 28, 2008 @ 1:56 am

4. 

   [...] Tools Home Equity Loans - The Basics - Part 3 Home Equity Loans - The Basics - Part 2 Home Equity Loans - The Basics - Part 1 All Types of [...]

   Pingback by Should I Buy First or Sell First? | MortgageTonight — January 11, 2009 @ 5:37 am

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