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There are many advantages associated with using a home equity loan to achieve some financial goals. If you own real property and have a first mortgage with favorable terms, a home equity loan can give you the funds you need for home improvement or repairs, major purchases (e.g. automobile), or debt consolidation at low cost.
Instead of closing costs of three to four percent (or more) of your loan amount, closing a home equity loan expenses should be between zero and one per cent. If you are buying an expensive automobile (aren't they all?), your interest expense is not tax deductible. However, if you use a home equity loan to purchase the vehicle, your interest could be tax-deductible, effectively reducing an already good interest rate. Should you need home repairs or improvements you've been wanting to make, an equity loan or line-of-credit might be the perfect choice to accomplish your goal. Instead of using credit cards or other non-tax deductible borrowing, a home equity loan would give you the best of all worlds: low interest rate, longer term repayment options, and tax deductibility.