By Jakob Jelling http://www.cashbazar.comHouseholds across
country are finding themselves in a similar situation. They lack financial funds to make necessary changes to their home and need to find a way to fund upgrades and eliminate debt. A popular way of financing these changes without killing themselves is by taking a home equity loan to pay down their debt.
The Home Equity Loan has become a fast-track way of paying down large credit card debt, financing college education and even taking a vacation. Since stock market has lost quite a bit of appreciation, people have been purchasing homes as a means of investment, thus sending housing prices through roof. With higher prices comes a great deal of appreciation in home. People who have found themselves in 20 – 30 thousand dollars in debt can pay it down by taking a home equity loan. Home Equity Loans have been a source of relief and flexibility to get homeowner out of debt and moving forward in life.
The home equity tax shelter
The greatest benefit from taking a Home Equity Loan is being able to crush debt, but also reduce amount you owe government every year. Most loans by design do not provide any tax relief, whereas a Home Equity Loan provides a direct line item to reduce your debt. To figure out your home equity value you can hire a professional appraiser to come out and tell you how much it is worth to a bank or financial institution. Once you have that figure you can easily find out how much equity you have in your home. For example, should your home appraise for $150,000 and you owe $ 60,000 you have $90,000 in equity. This equity will not become a taxable event should you buy a bigger home and spend more money. Should you step down in your home, you can be penalized for difference, provided that you have not already taken one-time exemption allowed by government.
