Equity Loans
Equity Loans questions and answers
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Q: What to look for when shopping around for home equity loans?
Any advice on what to look for when shopping around for home equity loans?
Are there referral commissions?
I have a couple of individuals looking for a home equity loan ... I told them I'd look into it for them. I'd like to find a quality vendor, but if referrals commissions are paid out, I'd like to negotiate for that too.
How do I figure out what is a "great deal"?
PS. I'll happily take general replies but this would be specific to Calgary, Alberta, Canada.
A: You have to have a mortgage license to collect a commission. It is not legal to be involved without a license.
Q: How tax deductible are charitable donations and home equity loans?
When they say donations and home equity loans are tax deductible, what does this mean? Does a $1000 donation mean $1000 less federal income tax? Does $1000 paid in interest on a home equity loan mean $1000 less federal income tax?
A: No, these become part of your Itemized Deductions if you plan to itemize. The Itemized Deductions reduce your taxable income, which in turn decreases the amount of tax you would owe.
For example (all hypothetical numbers), if your gross income 20,000 and your itemized deductions are 6,000, then your taxable income becomes 14,000. And the tax is calculated off 14,000. (Of course there is still an exemption to account for, but that's not what we are talking about).
Tax credits reduce your amount of tax directly. Deductions reduce your income. I hope this all makes sense.
Q: Should I take out a Home Equity loan to pay off my private Student loans?
I heard that taking out a Home Equity loans to pay off my private student loans is an option. They are several loans through Sallie May resulting in $79,000 including interest, but are not consolidated. What are your opinions?
A: evaluate the term of the loans, the interest rate you would be paying and if they are tax deductable now, and if you can make use of the deduction should you shift them to a home equity loan. Then, decide if there is any chance you could be unemployed or otherwise without the means to pay on the loans. If so, you may not wish to offer your home as collateral to these loans.
It's going to be a matter of balancing the interest costs against the risk to your home most likely.
Don't forget to match the terms of the loans when evaluating on a payment basis.
Q: is there a place that offers home equity loans to people that have bad credit?
my boyfriend and i own our home with no mortgage. we have around $76,000 of equity in our home but have bad credit. is there somewhere we can go for a loan that works with the better business bureau. i want to make sure its legit.
A: $76,000 equity is a dream for a mortgage lender. They are loaning primarily on the equity on your house; not as much on your personally. The going rate on a 2nd mortgage ( another word for homeequity loan) is 8.25%. That is a fixed rate for 15 years. WIth bad credit you will pay 9.875%. Sorry but that is the penalty you pay for your previous mistakes. You can have the money 4 days after you apply.
Q: Public Records Reading- Mortgages, Do home equity loans show or just reverse and second mortgages?
I read public records when doing RE research so I'm wondering. I guess that only second and reverse mortgages show. And why would someone choose a second mortgage vs home equity loan?
Are we saying that a home equity loan automatically shows as a lien?
A: all mortgages and liens against a property are available if you go to the court house and research the property. and usually people take second mortgages when they already have a first mortgage and a home equity loan is really a second mortgage .
Q: Home equity loans what happens when my mom dies?
My mother who is 85 got a equity loan on her home rather than a reverse mortage loan. I was told today that when she passes the total loan becomes due and payable? Basicly that we can't just keep making the payments. Is that true? She did this loan so the house could stay in the family rather than it being lost at the time of her death? Wat that the right choice any input would be appreciated.
A: When you mother passes and the house becomes yours, you can get a new equity line to pay off the old one or get a new mortgage that will pay off the equity line and any old mortgage. The equity line may or not have been a good idea, but it's not the worst thing ever. Call your mortgage broker and have a conversation about it to get more info.
Q: Is it smart to use a home equity loan to pay off car loans, and a line of credit?
My husband and I need to lower our monthly payments. We have no debt except a line of credit for $60,000 with the payment of $410 and two car loans both adding up to about $25,000 and the combined payment of $1050/mo. So, we are spending about $1400/month for these 3 things. If we got a loan for $110,000 and payed all these off, our payment at 6.6% would be around $700/month. Of course I would always pay more than that per month which would go to principle. Why isn't this a good thing to do? I realize that getting a new car would add to our payments once again. So, that would not be smart. Other than that, is this a smart thing to do? It seems like it is, but then why don't more people do this?
A: In theory it sounds good. But here's what happens. You borrow the 100 grand and now you have financed your two old cars for 15,20 or 30 years. If that isn't bad enough statistics show that you will have more car loans, credit cards, etc. PLUS the 100 grand loan in 5 years. You cannot "borrow" yourself to prosperity. Pay off your obligations without refinancing and you will be proud of your actions.
Q: What's the real deal with home equity loans?
Lately I haven't been working as many hours because of cutbacks so I've fallen behind in a few payments. So I've tried to obtain a small loan from a few banks with no luck. I've been paying my morgage on time for more than 15 years and never considered home equity. Why are these banks telling me I can't be approved for a small amount but they'll let me borrow 10 times as much with a home equity loan?
A: Well, lets' see. A small loan, there's probably nothing behind it other than your good word. A home equity loan, your house is behind that. Fall behind on those payments enough and the bank can foreclose on your house. That a good reason for them to prefer you getting a home equity loan?
Q: Why is it that many loan companies wont provide home equity loans on property that are used for agriculture?
One that comes to mind is quicken loans. Any information would be appriciated, thanks.
The thing is, my home is included in my land that I use for cattle grazing.
A: This is an easy one, I've run into this too. Federal foreclosure laws are WAY different for residential than for agricultural land. If you default on a residential loan, and they foreclose, the redemption period is 3 months, then they can take the house and evict you.
For agricultural properties the redemption period is a year. So you can stop making your payments this month, and basically get to live in it totally free from now until January, 2009. That's why they won't loan on it, a lot of people have taken advantage of that loophole.
It's because the farm properties are considered income producing, so they can't take away your livelihood.. 10 points, please! :)
Q: Are architect or permit fees considered part of "construction costs" for home equity loans?
We plan to use a home equity loan to rebuild our studio, putting the loan money in a separate bank account and using that account solely for "construction costs" to ensure the interest remains tax-deductible.
Question 1: We're paying an architect to design the building and we have to pay the city a permit fee to review and approve the design. Are these two fees considered part of the "construction costs" of a building so we can use the loan to pay these without worrying about the IRS coming after us?
Question 2: Given this scenario, would it be wiser to use a Home Equity Line of Credit so we only borrow what we need when we need it? My concern (as always) is variable interest rates on the lines of credit, so I'd get a lower interest rate today, but it might be higher next year.
Thanks!
Joe
A: yes, of course., these are legitimate costs and can be put into the taxable basis of your house. I wouldn't go for a variable loan in this economy. Rates are on their way up, maybe way..... up. Go for a fixed rate conventional mortgage of no more than 30 years.
Q: Are home equity loans a good way to consolidate debt? If not what is better?
Instead of paying on 2 credit cards that are fairly high balances, should I pay them off with a equity loan and have one payment and keep my credit card balances zeroed out each month.....
A: That depends on where you live. In some states a home equity line of credit can adjust in time to a very high interest rate and is revolving just like your cards are. I would look at it as the interest is tax deductible in most situations. So look at all options but you may want to choose a fixed rated second deed of trust as a better option. Look at the rates in your state for the best offerings. All states have some sort of limits on the max.
But to answer you yes if you have the equity and the credit score then you should probably do so. Just get all the information you need to make an informed decision.
Good Luck
I am a Loan Officer
Q: What happens with home equity loans or lines of credit if you file for bankruptcy?
Would these debts be "forgiven" also and if so, does this affect your house which was used to achieve the loan?
A: With the new laws in bankruptcy, any loan, or debt you owe has to be included in any bankruptcy filing. I'm assuming from your ? that's what you are asking. Bankruptcy also depends on median income, debts, and passing a means test for a chapter 7.....if you don't qualify....chapter 13....not much info in your ?......Good Luck!
Q: What happens with Home equity loans and lines of credit if you file bankruptcy?
Would these debts be "forgiven" also and if so, does this affect your house which was used to achieve the loan?
A: The answer to your question is pretty complicated. I would definitely contact a financial professional and discuss this before making any decisions regarding bankruptcy.
The short answer is the debt may be forgiven if it's directly part of your bankruptcy. But you'll still have a foreclosure on your home and the lender of the home equity loan and home equity line of credit could put a lien on your home, but it's doubtful they could force you to sell or leave your home. You'll really need to talk with them about that. Be up front about your situation and see if you can work out a solution in both your best interests.
Remember, your credit will be shot for several years after a bankruptcy and it won't help to have a foreclosure as part of your credit history. This is a bad time to have really bad credit. You'll have a lot of difficulty getting loans in this market with terrible credit.
If there is any way you can avoid bankruptcy and foreclosing on your equity loans, I recommend taking that route. It will save you a lot of headaches and financial stress down the road.
Q: what do I need to know about home equity loans when appling to makd good choice or should I get just a loan?
cant decide if I want private loan home equity or 2 moragage dont know which way is best
A: It's not easy, and without more information I cannot give you direct advice. But visit the mortgage Professor - you'll find a link to his website on mine.
See source pages below.
Good luck!
Q: are equity loans better than getting a mortgage? if i could get a loan for the same amount bewtween a?
mortgage and equity loan, does one have a better interest rate than the other overall? does an equity loan have an advantage or is it almost the same thing if i just got another mortgage?
A: A mortgage will likely be at a lower rate, but will have closing costs and will take longer and require more steps to approve. Most lenders offer equity loans with little or no fees, and the underwriting is much quicker. However, if your credit history is poor, you will have better chances getting a mortgage refinance approved. The best advice is to use a local broker who can advise you on the best solution in your situation, then shop for the best rate/lowest fees using a single inquiry on your credit.