Using Equity to Finance Home Repairs
by: John Mussi
A home equity loan allows you as a homeowner to get a loan by using the equity in your home as your collateral. The equity here consists of whatever funds you have invested in your property in order to own it or improve it. Since it is a debt against your own property, which you are in actual possession of, a home equity loan is a secured debt. The property can be required to be sold if you are unable to pay the money back that you have borrowed.
Home-equity loans typically have fixed rates and give you five to 15 years to repay. Home-equity lines of credit usually have variable rates and a 10-year period during which you make only interest payments, followed by a 10- or 15-year period during which you must pay off the debt.
Why Should I Consider a Home Equity Loan to Pay for Repairs?
Repairs and maintenance are part of the routine costs of owning a home. Such expenses ideally should be paid out of your current income. Some years you'll spend less, but other years you'll spend more, and it can be handy to have some cash saved up for bigger repairs. If you don't have the cash but need to make the repairs to preserve the value or safety of your home, then a home-equity loan or line of credit can be a good alternative. The interest rates on home-equity borrowing tend to be low, and your interest payments may be tax-deductible.
When you're using home equity for repairs, though, you should try to pay off the loan as quickly as possible. Unlike home improvements, repairs don't add much value to your home, so it doesn't make sense to stretch out the repayment.
Tax benefits of home equity loans
A home equity loan is also beneficial because the home equity loan rate charged is usually tax deductible, as the loan is used for its primary functions. You can check on various home equity interest rates with a home equity loan calculator and decide what the best rate is for you. This is not the case with other forms of consumer credit, like credit cards and auto loans.
Do Your Homework
Contact several lenders--and be very careful about dealing with a lender who just appears at your door, calls you, or sends you mail. Ask friends and family for recommendations of lenders. Talk with banks, savings and loans, credit unions, and other lenders. If you choose to use a mortgage broker, remember they arrange loans but most do not lend directly. Compare their offers with those of other direct lenders.
Be wary of home repair contractors that offer to arrange financing. You should still talk with other lenders to make sure you get the best deal. You may want to have the loan proceeds sent directly to you, not the contractor.
Comparison Shop
Comparing loan plans can help you get a better deal. Whether you begin your shopping by reading ads in your local newspapers, searching on the Internet, or looking in the phone book, ask lenders to explain the best loan plans they have for you. Beware of loan terms and conditions that may mean higher costs for you. Negotiate with more than one lender; don't be afraid to make lenders and brokers compete for your business by letting them know you are shopping for the best deal. Ask each lender to lower the points, fees, or interest rate. And ask each to meet--or beat--the terms of the other lenders.
You may freely reprint this article provided the following author's biography (including the live URL link) remains intact:
About The Author
John Mussi is the founder of Direct Online Loans who help homeowners find the best available loans via the www.directonlineloans.co.uk website.
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Collecting The Levy
Collecting The Levy
by: Henry Byers
The Financial Management Service (FMS) is a bureau of the Department of the Treasury, to provide a centralized debt collection service to most federal agencies. The FMS has begun utilizing two Congressionally mandated federal debt collection programs. One is devised to collect delinquent non-tax debt by neutralizing federal payments and the other is to collect delinquent tax debt from those individuals who receive federal payments.
The Tax Payer Relief Act of 1997 authorized the IRS to collect delinquent tax debts from individuals and businesses that receive federal payments, by levying up to 15% of each payment until the debt is paid.
Before the IRS transmits an electric file to the FMS, the IRS will send each tax debtor a notice by certified mail that will include the tax bill, a statement of the intent to levy, an explanation of the debtor's rights to appeal, and an IRS phone number to inquiries...
Collecting The Levy
Tax help > Collecting The Levy
Why Buy A Hybrid Car?
Why Buy A Hybrid Car?
by: Ron King
For anyone interested in saving money at the gas pump and helping the environment, the new hybrid cars are an excellent choice. Small and fuel-efficient, hybrids are now being made by more manufacturers than ever.
Although hybrids cost more, and can be hard to find due to high demand, it still pays to choose a hybrid. Consider the following reasons to buy a hybrid next time you are in the market for a new car.
Smaller, More Efficient Engines
The hybrid's fuel efficiency is increased by its small size and the use of lightweight materials. Periodic engine shut-off is another fuel saving feature of the hybrid. When it is stopped in traffic, the hybrid's engine temporarily shuts off. The engine restarts automatically when the car is put back in gear.
Hybrids are powered by the combination of an efficient gasoline engine backed by an electric motor for acceleration. The electric motor is powered...
Why Buy A Hybrid Car?
Tax help > Why Buy A Hybrid Car?
Why Buy A Hybrid Car?
Why Buy A Hybrid Car?
by: Ron King
For anyone interested in saving money at the gas pump and helping the environment, the new hybrid cars are an excellent choice. Small and fuel-efficient, hybrids are now being made by more manufacturers than ever.
Although hybrids cost more, and can be hard to find due to high demand, it still pays to choose a hybrid. Consider the following reasons to buy a hybrid next time you are in the market for a new car.
Smaller, More Efficient Engines
The hybrid's fuel efficiency is increased by its small size and the use of lightweight materials. Periodic engine shut-off is another fuel saving feature of the hybrid. When it is stopped in traffic, the hybrid's engine temporarily shuts off. The engine restarts automatically when the car is put back in gear.
Hybrids are powered by the combination of an efficient gasoline engine backed by an electric motor for acceleration. The electric motor is powered...
Why Buy A Hybrid Car?
Tax help > Why Buy A Hybrid Car?
Unclaimed Tax Refunds: How To Claim Yours
Unclaimed Tax Refunds:
How To Claim Yours
by: Gray Rollins
When a taxpayer owes money on their taxes they need to pay the amount owed before the traditional April 15th deadline. If the amount owed on taxes is not paid before the deadline, then federal and state governments can impose a number of late fees and penalties. While there are penalties for failing to a pay taxes on time, there are no penalties assessed to individuals who are due a refund but fail to file their tax returns on time. http://www.taxhelpdirectory.com/taxfiling/
Tax season is a stressful time for many taxpayers. With hectic lives and busy schedules it is likely that an individual may not find the time to have their taxes prepared. As previously mentioned, there is the chance of late fees and other additional penalties for individuals who owe taxes; therefore, many individuals who are expected to owe...
Unclaimed Tax Refunds: How To Claim Yours
Tax help > Unclaimed Tax Refunds: How To Claim Yours
Taxes and Bankruptcy: The Nuts and Bolts
Taxes and Bankruptcy: The Nuts and Bolts
by: Richard K. Gustafson, II
The filing and subsequent discharge of either a Chapter 7 or a Chapter 13 bankruptcy may eliminate some types of personal income tax liability. There are, however, certain restrictions which must be met in order to completely eliminate personal income tax liability through bankruptcy.
Some personal income taxes may be eliminated through the filing and subsequent discharge of a Chapter 7 bankruptcy. The following requirements must be met for the personal income tax liability to be eliminated in a Chapter 7 bankruptcy:
? The tax return must have been filed on time
? The filing should not be fraudulent
? The tax return must have been filed over three years ago as of the bankruptcy filing date (e.g. IRS debts for the last three years generally, would not be dischargeable)
? Alternatively, in some cases, if the tax return was filed late, was not fraudulent...
Taxes and Bankruptcy: The Nuts and Bolts
Tax help > Taxes and Bankruptcy: The Nuts and Bolts
What is a Reverse Mortgage?
What is a Reverse Mortgage?
by: Stuart Simpson
Simply stated, a reverse mortgage is a loan that enables homeowners (age 62 and older) to convert part of the equity in their home into a tax-free income without having to sell the home, give up the title, or take on a new monthly mortgage payment.
More and more homeowners are using this to supplement their retirement income, pay for health care, modify their home, or just get some cash for emergencies.
Since this is a new product, some people have misconceptions of what a reverse mortgage is.
The bank doesn?t give you money and take your house.
Let?s look at some of the most common questions.
Are reverse mortgages for desperate people?
No.
It is an excellent financial planning tool used from people of all walks of life.
How do I qualify?
You must be 62 or if both parties are on the mortgage, then you both must be at least...
Tax help > What is a Reverse Mortgage?