Profile picture for Moneyb1

I've lived in my house for almost 1 1/2. Is it ok to take an home equity loan?

What are the pro's vs the con's?
  • November 17 2010 - San Diego
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Answers (11)

Profile picture for blue screen exile
If your goal is to pay off other credit cards, you should just get one of those 0% interest for 12 months credit cards presently being offered, transfer your balances for what ever the fee is, and then pay off the credit card debt as quickly as possible, which means don't go out, don't buy new clothes, only eat peanut butter, rice and beans, and take on an additional job until the debt is paid off.
  • December 09 2010
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Taking one out is one thing and using it is another. I would get one just to have it, but this is not a time for leveraging real estate. We have a way to go with this recession in home prices, but as a cheap short-term loan vehicle it is OK.
  • December 09 2010
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Whether or not consolidating all of your debt is a good strategy depends on several factors, such as, what type of debt it is, what rates of interest those items are at and also the term they carry.  Make sure that a TOTAL COST ANALYSIS is provided to you by a professional to give the complete view of the benefits & downsides. 

If you have need of any assistance, I'd be happy to help.
Just view my profile for my contact information.
Best wishes,
Steve
  • December 02 2010
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Moneyb1,

You need to keep in mind how much interest you will be paying over the life of the loan.  It might save you money in your budget today but the interest paid on that debt can last for up to 30 years depending on the type of loan you obtain.  Do you have equity?
  • December 01 2010
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Profile picture for Moneyb1
My goal is to pay off all depts; so all thats left is my mortage. Is that good or bad?
  • November 30 2010
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There are many variables to consider when reviewing your refinance &/or home equity options.  The best way to determine which option makes the most financial sense and matches your overall goals is to have a TOTAL COST ANALYSIS provided to you.  This analysis will break down the interest left on your current mortgage & compare the interest and costs of refinancing, along with strategies on how to best use/re-direct the savings.

Feel free to contact me with any questions.  We'd be happy to provide you with more information.

Best regards,
Steve

  • November 29 2010
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Hi, What is the goal? I have to answer this one with a question.
  • November 29 2010
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Great advice from all who answered. When you can do it financially, only do it if you really need it.

  • November 17 2010
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It really depends on what you plan on doing with the equity line.  Consult an accountant and financial advisor to find out how this will impact your long term financial goals.  I would outright avoind using your home as an "ATM" machine.  As already stated in the other posts, if you financed the majority of your purchase price you may not have enough equity to put a home equity line in place.  You should talk to a lender first to see if you have any equity loan options.

  • November 17 2010
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Profile picture for the_country_hick
Look at your amortization tables for your mortgage. You pay off almost nothing for the first 3 years. Even by year 7 you are just about ready to break even when you include selling costs with no price changes.

After 18 months you probably have to spend as much to get that loan as you could get for the loan.
  • November 17 2010
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Profile picture for wetdawgs

Unless you put down a very large down payment, chances are good that you don't have sufficient equity in your home after 1.5 years to qualify.

  • November 17 2010
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