Low Mortgage Rates for Smart Loan Shoppers
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Low Mortgage Rates for Smart Loan Shoppers |
Home Equity Lines of Credit Provide Flexibilityby Karen LawsonCMR Columnist Need money to upgrade your home or pay off high-interest credit card balances? A home equity line of credit (HELOC) provides a quick source of cash for many purposes. Unlike traditional mortgage loans, a home equity line of credit is flexible; you spend only what you need when you need it. If you do not use any funds from the line of credit, no payment is due. Fast Cash from HELOCs and Financial WisdomMaking home improvements, short-term loans, unexpected expenses, and paying off high-interest credit cards are a few ways to use a home equity line of credit. And what about that new sports car you've always wanted? Not so fast! It may be tempting to use your home equity line of credit for vacations, flashy cars, and other splurges, but remember that, as with a mortgage loan, your home is collateral for your home equity line of credit. For this reason, the Federal Trade Commission cautions borrowers against frivolous use of home equity loans.Digging out of Debt, or Digging in Deeper: Borrower Beware!Using a HELOC to pay off high-interest credit cards and loans is advisable only if you subsequently limit your spending to what you can repay each month. Homeowners can get into trouble by repeatedly using a home equity line to pay off credit card balances.Finding the Right Home Equity Line of CreditHELOCs are available through banks, savings institutions, and credit unions. Many are offered without up-front loan fees. Shop for an interest rate and terms that best suit your needs. Used wisely, a HELOC is a valuable tool for improving your home and enhancing your financial future.Source Federal Trade Commission Website About the Author Karen Lawson has more than fifteen years of experience in the mortgage lending industry. She earned an MA degree in English from the University of Nevada, Reno. © 2006 CMR. All rights reserved. |