HOME LOAN

• Interest on home equity loans are generally tax deductible up to $100,000

• Banks love this type of loan because it is secured by the borrower's home

• Home equity loans can have much lower interest rates than credit cards or unsecured personal loans

• The money from this type of loan can be used for a variety of uses: paying off debts, buying a new car, medical costs, college education

• Home equity loans stimulate the economy because the money is circulated back into the market

• Can be used to improve your credit rating by paying off other debts

• Usually takes less time to obtain than your original mortgage (2 weeks versus a month or more)

• You can lose your home if you default on your payments

• Home equity loans can be risky for young homeowners whose jobs are not as secure or established as older borrowers, and who have less experience owning a home and managing money

• They can also be risky for older borrowers who may be tapping into their retirement fund

• The interest rate on an adjustable-rate home equity loan can increase dramatically during an adjustment period

• 125 percent home equity loans are not totally tax deductible

• Under certain circumstances, lenders can freeze a borrower's line of credit, or demand full payment of the loan

• You may not be able to lease your home during the term of the loan