As your home appreciates in value, you gain equity. You can look at this equity, as a portion of value of your home, which becomes an asset that is not burdened by debt. Therefore, this is a critical financial vehicle that cannot be ignored.

Let me say it another way. For most of us, your home Equity is likely to be, primary, unencumbered assets of your own, personal estate.

Here are several things to consider, when managing this critical financial leverage:

1.Retirement 2.Debt Consolidation 3.Home Improvements 4.Equity Lines of Credit 5.Other

1.Retirement:

Personally, I hate debt. I absolutely, positively, detest debt. I do everything in my power to completely eliminate it from my life. Therefore, this first method is my own, personal favorite.

a)Leave it alone. Ignore it. Pretend it’s not there. Forget about it. Live life as if it did not exist.

b)The equity in your home can become an absolutely essential cog in wheel of your retirement. But in order for it to work its magic, you need to allow it to build and grow, and avoid all temptation to tap into it.

c)If you can do this, then at end of tunnel, there is a nice nest egg waiting for you.

2.Debt Consolidation:

Of course, above principals of using equity for retirement may not be entirely wise, if you are burdened with additional debt.

a)If your debt is large and encumbering enough, then you may want to consider refinancing and incorporating that debt into a new, first deed of trust. Not only is this more organized and simplified, but you can stretch loan out over 30 years, thus allowing more affordability.

b)If you wish to pay off additional debt sooner, or if debt is small enough, then you might want to consider a second mortgage on home.

c)Either way, interest paid on either new first loan, or second loan, will be a write off, and thus, you will gain an added benefit by restructuring.

d)In addition, interest rate on a second (or first) is far lower, then what you’d expect to pay on an unsecured loan, such as your credit card.

3.Home Improvements:

There comes a time in everyone’s life, when you just want to make some changes around homestead. If you are in market for a new pool, a decked out backyard landscaping job, a new roof, or new appliances, et al., then a second loan or refinance is generally way to go.

Many people dream of owning their own homes but only very few are able to pay cash for them. This is why FHA mortgages are one of popular methods to find a source for consumer credit. People who could not otherwise afford to own a house become homeowners with help of FHA mortgage insurance programs.

FHA is Federal Housing Administration. As part of U.S. Department of Housing and Urban Development (HUD), one of chief purposes of FHA is to help people obtain financing for their homes.

How FHA Mortgage Insurance Works

As stated earlier, FHA mortgage is a way for homebuyers to obtain financing for their homes. All home purchases require buyers to make a certain set percentage of total purchase price, called down payment. What FHA mortgage insurance does therefore is to allow a homebuyer to make a modest down payment and obtain a mortgage for balance of purchase price.

The mortgage loan itself is made by a bank, a savings and loan association, a mortgage company, a credit union, or any other lender. For it to become an FHA mortgage loan, lender would have to be approved by Federal Housing Administration. FHA (HUD0 insures then insures loan and pays lender if borrower defaults on mortgage. The protection offered by FHA mortgages to lenders allows them to be more liberal with their terms than prospective homeowner might otherwise obtain.