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Cash-out refinancing vs. home equity
loans |
| Q: Can you get money out of refinancing your
home to use for major home repairs? Or should you just get
a home equity loan? There is only about a 1 to 1.5 percent
difference in the two loan rates. |
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Is a home equity loan right for
me? |
| Q: I recently purchased a new home and now want
to put an in-ground pool in for my children to enjoy. My mortgage
is $194,500, and my home is appraised at $260,000. Should
I get a fixed home equity loan to purchase the pool? I want
the lowest monthly payment possible. |
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Loan consolidation...Lower your
payments and get a tax break! |
Most of us can run up credit card debt without
even knowing exactly how we did it.
We look at that statement with the big numbers and try to
remember where the money went. A few dinners here, some clothes
there, a short weekend getaway, late charges and, finally,
over-the-limit fees. Then add lots of interest that your parents
used to be able to deduct from their taxes but you can't.
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What is cash-out refinancing? |
| Cash-out refinancing is a transaction in which
a new mortgage is issued that is greater than the outstanding
unpaid principal balance of the previous mortgage. Cash-out
transactions allow homeowners to spend the equity they have
accumulated in their homes. It differs from a home equity
loan or line of credit in that it's a new mortgage, not a
second loan against the equity in a home. Both cash-out refis
and home equity loans provide vehicles for taking cash from
the home's equity. |
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