At
Sky Home Loans we give it
to you simple and straight. Everything you
need to know about refinancing a mortgage with
the best mortgage and home loan rates. Refinancing
a Mortgage or home loans is vital if done
right. We have the best home mortgage loan
refinancing programs and please use our
home loan refinancing mortgage calculator
to find out what sort of home loan you can
afford over any mortgage repayment period.
At Sky Home Loans we have the best mortgage
and home loan consolidators giving advice
so you can be sure that the whether you are
looking for a home consolidation loan or
simple Refinancing a Mortgage, we have the
right mortgage advice at the Refinancing
a Mortgage center a division of Sky Loans.
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Find Info on Refinancing a
Mortgage below:-
Refinancing a mortgage - Home Equity Loans
What is a home equity loan?
A home equity loan is a loan that uses your home
as collateral. Your home equity is the part of your
home that you actually own and this is the guarantee
for your loan.
Your home equity is calculated by taking the current
value of your home and subtracting your mortgage.
For example, if your home is worth $150, 000 and
you have a $100,000 mortgage, you have $50,000 of
equity in your home. A home equity loan allows you
to borrow money using your equity of $50,000 as security
for the loan.
A home equity loan, often called a second mortgage,
reduces your equity or ownership in your home. Since
your home guarantees your loan, if you default on
the payments, you can lose your home.
Advantages and Disadvantages to getting a
home equity loan
A lower interest rate and tax deductions are the
two major advantages home equity loans have over
other types of debt.
Since a home equity loan is secured by your home,
it poses less risk to a lender than does a non-secured
personal loan or credit cards - this lower risk is
passed on to you in the form of a lower interest
rate.
The second major advantage is that regardless of
the way a home equity loan is used, the interest
you pay on the first $100,000 you borrow is tax deductible.
Credit cards and other types of non-secured loans
do not have this tax benefit. This means that if
you pay $3,000 in interest on your home equity loan,
you will reduce your taxable income by $3,000 at
the end of the year. If you use a home equity loan
for home improvements or to buy another home, you
can deduct the interest paid on the first $1 million
that you borrow. The reason for this is that home
improvement loans are similar to first mortgages
for tax purposes. You should consult a tax advisor
about the specific tax benefits available to you.
The biggest drawback of a home equity loan is the
fact that your home is on the line and you could
lose your home if you default on your payments. When
you borrow from your home's equity you also reduce
the equity or ownership you have in your home. This
means that you trade ownership or equity in your
home for cash that you will use for some some other
purpose. In addition to interest you will pay on
the loan, there are also costs associated with taking
out a home equity loan - these costs are similar
to the costs you paid when you bought your home.
Useful Refinancing a Mortgage
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