The most common uses of the home equity loan are to pay for college tuition, consolidate your bills in to one convenient payment, do major home construction, purchase a car, boat or RV, or make investments. Use your home equity loan for furnishing/remodeling your home, business, or get cash out for other purpose.
Cash Out Plans - Refi vs Equity
When you decide whether to do the cash-out refinancing option, keep in mind that:
1. You have to pay closing costs when you refinance your loan;
2. You don't have to pay closing costs for a home equity loan.
3. Closing costs can amount to hundreds, even thousands of dollars. To begin the process LoanWeb
If your current mortgage is at a lower interest rate than you could get now by refinancing, it's probably better to get a home equity loan.
Private Mortgage Insurance
You'll have to pay private mortgage insurance if you end up borrowing more than 80 percent of your home's value. It might be cheaper to take out a home equity loan.
Paying off high-interest credit card debt.
Paying a lower interest rate and taking a tax deduction is smart but lengthening the time it would take to pay off the credit card debt may not be. Why take 30 years to pay off credit card debt that could be wiped out in five or 10 years using a shorter-term home equity loan.
Home equity loans programs may consist of minimum withdrawal requirements when you open your account or maximum withdrawal requirements after your account is opened. Gaining access to your credit line with checks, credit cards, or both may be possible with certain plans. To begin the process LoanWeb.
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