Home > Self Help > Fix Your Finances > Credit & Debt  > All About Debt

Home Equity Debt

 
Janet Bodnar
Meet the Expert
kiplinger.com
  • When should I consider tapping into a "home equity line"?
  • How much should I borrow on a home equity line?
  • How can I keep my home equity borrowing in check?
  • How can I find a great home equity loan?
Email a friend
more ...
All About Debt
 Credit And Debt Defined 
  1. Janet Bodnar
  2. What is "debt"? 
  3. What are the different types of debt? 
  4. What is "principal" and what is "interest"? 
  5. How is interest calculated? 
  6. What is the difference between a "fixed rate loan" and a "variable rate loan"? 
  7. What is an "unsecured debt"? 
 Managing Debt 
  1. Janet Bodnar
  2. What is "good debt" and "bad debt"? 
  3. What is the difference between "deferment" and "forbearance"? 
  4. What is the secret to managing a student loan? 
  5. How much debt is too much? 
  6. What interest payments are tax deductible? 
  7. How can I figure out my "after tax" interest rate on tax deductible debt? 
  8. What is "refinancing"? 
 Prioritizing Debt 
  1. Janet Bodnar
  2. What debts should I pay off first? 
  3. How can I determine my debt repayment strategy? 
  4. Should I make paying off my mortgage my debt priority? 
  5. What are some examples of bad debt repayment strategies? 
  6. Should I pay off debts rather than put money into my savings? 
 Mortgage Debt 
  1. Janet Bodnar
  2. How can I determine how much I can afford to spend on a mortgage? 
  3. Should I get a "fixed rate" or "variable rate" mortgage? 
  4. How should I choose a mortgage? 
  5. How can I get a great deal on a mortgage? 
  6. When should I consider refinancing? 
Home Equity Debt (Now Playing)
  1. Janet Bodnar
 The Price Of Debt 
  1. Jordan Goodman
  2. How much do most Americans owe? 
  3. Will I always have debt? 
  4. Is is possible to live debt-free in the US these days? 
 Credit And Debt Spending Analysis 
  1. Janet Bodnar
  2. What is a "spending analysis"? 
  3. How do I do a spending analysis? 
  4. What are "fixed" and "variable" expenses? 
 Managing Debt 
  1. Mitchell Freedman, CPA/PFS
  2. What is "debt"? 
  3. I want to lower my debt. Where should I start? 
  4. Should I hire a credit repair firm? 
  5. Should I hire a credit counseling agency? 
Janet Bodnar Ms. Janet Bodnar
 Print
Transcript

Home Equity Debt

When should I consider tapping into a "home equity line"?

Be very careful and cautious about tapping into your home equity line because in fact this is the roof over your head. One perfect example of a time you might want to tap into your home equity line is if you want to improve the value of the property. You want to do a big remodeling project. So, you're really actually improving the value of the property. That would be a good time for taking out a home equity loan. Also, suppose you need the money in an emergency. That's a really good time to think about tapping your home equity loan. You should not tap your home equity for any kind of asset that's going to depreciate. That's definitely something you don't want to do. Money that you're going to spend immediately. Sometimes you don't even want to tap it to consolidate your credit card debt for example because then your house is on the line to pay off your credit card debt. It would really be better if you could find a different way of paying off that debt.

How much should I borrow on a home equity line?

You're probably going to be limited, as far as how much you can borrow on a home equity line, by how much a lender will lend you. There are standards. They don't like to lend more than, say, seventy-five to eighty percent of the value of your home; and that would include the first mortgage. So if you still have outstanding mortgage debt, that amount of money would go in there as well. If there's any wiggle room between what you owe on your first mortgage and seventy-five to eighty percent of the value of your house, then that's the amount you could borrow as home equity. But again, your house is on the line if you're borrowing this money, so you don't want to borrow frivolously. You don't want to borrow any more money than you feel comfortable with.

How can I keep my home equity borrowing in check?

Don't go overboard on your home equity borrowing. If you're going to borrow against your home equity, know what the goal is, have a specific purpose in mind, and also have a payment plan in mind so that it doesn't just drag on and never gets paid off. Always pay more than the minimum amount the lender is going to require when home equity borrowing. Say, "OK, I'm going to borrow this amount of money, but I'm going to have it paid off in three years." Or, "I'm going to have it paid off in four years." So eventually that home equity is intact again.

How can I find a great home equity loan?

Well I would start by shopping online. Just go online to the various mortgage sites to see what various brokers are offering. It's kind of comfortable for you because you can do it on your own and you can look at the terms that are available, and one thing you would look at would be the interest rate as quoted by annual percentage rate. That's how you would compare one loan with another or one broker with another; so that's one thing to look for. Sometimes the annual percentage rate would also include certain fees that the brokers are charging, you'd want to know that as well. You also might want to look at things like closing costs, can I get a home equity loan with no closing costs; some lenders will do that for you. If it's a variable rate loan, and it probably will be, what's the margin above the bench mark. If the prime rate is the bench mark, is it prime plus one point, or prime plus two interest rate points? You would also want to know if there is a cap on the loan, if it's going to be able to adjust, is there a cap on the adjustments, an annual cap, or is it a convertible loan. Also could you convert it to a fixed rate loan if interest rates were to rise? So those would be some of the things that you could look at and compare at various mortgage websites.

Content of this interview is subject to terms & conditions
Email a friend Email a friend
Add to favorites Add to favorites
Rate this Interview:
Views: 193
Click stars to rate this film
0 ratings
  • Bookmark
  • Embed
  • Download

Bookmark this page on your favourite social bookmarking site:

Delicious Google Yahoo! Digg Stumble Upon Facebook BlinkList Spurl Reddit Furl Wists Simpy Newsvine Fark Blogmarks Netscape Windows Live! Ask Jeeves! Add this page to Mister Wong

Link to this page:

Embed this interview:

Embed single question:

  • When should I consider tapping into a "home equity line"?
  • How much should I borrow on a home equity line?
  • How can I keep my home equity borrowing in check?
  • How can I find a great home equity loan?

You must Login or Sign up to Download the different versions.

IPod

Download IPod Version

PSP

Sorry, PSP version is not available

Mobile (3GP)

Download Mobile (3GP) Version

MP3

Download MP3 Version

Subscribe to RSS feed Comments:

Order by: 
Vote for Vote against Report this
Anonymous  (51 days ago)

The Home Equity Debt info is a good one! We offer 125% Equity Loans for any purpose loans you would require. Example: Debt Consolidation loan, HOme improvement or any other purpose! Go to http://www.FastLoan24.co.uk

Previous 1 Next
Page 1 of 1
 

Would you like to comment?

Please login or sign up for a free account.
Add your comment Add your comment in the box:
Please keep your comments relevant and respect other users.
Ask me to sign up or log in (so my username appears next to my comment)
Submit

All Related Content:

Credit & Debt :
All About Credit
All About Debt
Financial Trouble
Spending Tips
Self Help:
Beating Addiction
Find Your Soulmate
Get Organized
Love Your Job?
De-Stress
Fix Your Finances
Get To Know Yourself
Simplify Your Life
Detox
Get Confident
Health & Happiness
The Paranormal & The Unexplained
Fears And Phobias
Get Happy!
Lose Weight
The Search For Meaning
All Channels:
Beauty & Style
Health
Modern Manners
Self Help
Cars
Jobs & Careers
Money & Wealth
Sports & Fitness
DIY & Home
Legal
Parenting
Technology
Education
Leisure & Hobbies
Pets
Travel
Environment
Love & Sex
Real Estate
Food & Drink
Made By You
Safety & Survival
Home
Popular Tags
Body Confidence Creating Space & Removing Clutter Current Affairs Dating Tips For Men Election 2008 Fast Folding First Date Advice For Women Getting A Date Getting A Date With A Guy Have You Found Your Soulmate? Kitchen Cleaning Photographer Quizzes Social Networking Top Tips For Dieting
Most Viewed in Credit & Debt
  • 1
    Save Money: 10 Things You Don't Need
  • 2
    Improving Your Credit Score
  • 3
    Saving And Controlling Your Spending
  • 4
    Managing Debt
  • 5
    Banks And Credit Unions
  • 6
    Cutting Your Spending
  • 7
    Prioritizing Debt
  • 8
    Debt Trouble
  • 9
    Credit Cards
  • 10
    Credit And Debt Defined
Discussion Forums
Start a Discussion   
 
You have 100 characters remaining.
Recent Discussions
  • 1
    Is It Better To Pay The High Amount Due Or The Small Amount Of A Credit Card If You Have 3 Credit Cards? 51 days ago    1 Response
  • 2
    I Cosigned For My 24 Year Old Son A Credit Card. He Hit Hard Times And Stopped Making The Payments 155 days ago    0 Response
  • 3
    Can A Bailiff In England Force Their Way Into My Home To Collect Goods Without A Court Order? 298 days ago    4 Responses
  • 4
    How To Repossess A Vehicle? 346 days ago    0 Response
About the forums
del.icio.us Google Yahoo! Facebook Digg Windows Live!
Link to This Page:
VideoJug
Help | About Us | Widgets | Advertise | Brand Video | Terms & Disclaimer | Privacy Policy | Contact Us
Copyright © 2006-2008 VideoJug Corporation Limited
home
Edition: US
My Jug | Upload | Login | Sign Up
Home  |  Discussions  |  Help
Food & Drink Love & Sex Beauty & Style Sports & Fitness   Health   Leisure & Hobbies Technology DIY & Home   Pets   Parenting Self Help
 More
  • Cars
  • Education
  • Environment
  • Jobs & Careers
  • Legal
  • Made By You
  • Modern Manners
  • Money & Wealth
  • Real Estate
  • Safety & Survival
  • Travel
cached: 05/07/2008 03:58:18