|Mortgage Refinance Information|
Home Equity Loan ? Still a Better Idea Than a 401(K) Loan
Anyone who borrows money is always looking for the cheapest source of funding. That makes sense; no one wants to pay more in interest than is absolutely necessary. And anyone with a sizeable amount of debt, such as credit card debt or a student loan, would be wise to consolidate their debt with a lower interest loan. One source of such a loan is a 401(K) account, which many consumers may have through their employer. Since the interest rate on Federal student loans rose on July 1, many students who missed that deadline may be wondering if consolidating through a 401(K) loan is a good alternative. Is it?
In a previous article, we have outlined several reasons why borrowing against a 401(K) account may be less favorable than using a home equity loan instead. The reasons include the fact that the interest on a 401(K) loan is not tax deductible, and that the borrower loses the ability for his or her investment to compound over time. If you have borrowed the money, it can't earn interest and the cost over twenty or thirty years could be dear. In addition to those, there are other reasons why a home equity loan would be a better source of consolidation funds.
The 401(K) loan is tempting. There is no credit check, the interest rate is usually favorable, and you are paying the interest back to yourself. The additional disadvantages are considerable, though. The money you borrow from your retirement account was money invested before taxes. The money you pay back is after-tax money, effectively increasing the amount that has to be paid back. Worse, should you lose your job, the 401(K) loan must be paid back immediately, in full. Should this not be possible, the loan is treated as a distribution, requiring the payment of a 10% penalty in addition to state and Federal taxes. With the job market still rather volatile, the additional risk of borrowing against a retirement account is substantial.
Borrowing against a tax-deferred retirement fund is rarely a good debt consolidation option. The tax disadvantages, the threat of penalties and immediate repayment and loss of compounding generally make such a loan a bad idea. Those with existing student loans should probably keep them; the interest is tax deductible and the rate is still lower than with most other consumer loans. For most anyone else, a home equity loan would be a better choice, offering deductible interest, fewer risks, and a fixed repayment schedule. Anyone considering a consolidation loan should consider all of these options carefully, as the cost of choosing poorly could be substantial.
ęCopyright 2005 by Retro Marketing. Charles Essmeier is the owner of Retro Marketing, a firm devoted to informational Websites, including End-Your-Debt.com, a Website devoted to debt consolidation and credit counseling information and HomeEquityHelp.net, a site devoted to information on mortgages and home equity loans.
Home Equity Loans Can Provide Cash in a Hurry
Think About the Long Term. Estimate how long you expect to stay in your current house. Depending on the severity of your situation and the real estate market at the moment, you might even want to considering selling your home altogether and taking on a short term rental in your new locale. If you expect to stay in your current home for a few more years, the flexibility of a home equity loan may work for you.
Homebuyers Loan Guide
If you are a homebuyer, there are a few points on a homebuyer's loan that you should keep in mind. These pointers simply ensure that you don't burden yourself with a loan or repayment and that you can get a justified return on your investment.
Seniors Can Use a Reverse Mortgage to Fund Annuities, Investments, and Insurance Policies
For many seniors in or entering retirement, the prospect of purchasing long-term care, investments or annuities can be cut short by a lack of retirement income. Statistics show that 3 out 4 seniors will have to lower their current standard of living during retirement. Social Security, IRA's, 401k's, and other methods of retirement income usually provide enough income for living expenses and recreational activities, but do not leave much room to improve your financial future. A Reverse Mortgage is an increasingly popular solution for increasing income, and large amount of tax-free funds to safely move into investments and securities.
Is It Time To Buy A House?
At some point as you're writing out your rent check, you get to the point where you look at the amount and think to yourself - at this rate, I could BUY a house. If you're fed up with paying rent every month that's high enough to finance a mortgage, it may be time to take a serious look at what it would take for you to get a mortgage loan and buy a home of your own. How do you know if it's time to stop renting and time to start investing your monthly payment in a house of your own?
Secrets Your Banker Wont Tell You - Which Loan is Best for You?
Recently I was driving in my Car and I heard an Ad for a Mortgage lender who claimed they would help you find the Best Loan out of over 400 Different Loan Types. 400 Different Loan Types now that has to be confusing. How do you find the Best loan for you. Clearly the Best loan for you is not the Not the best loan for your bank. Learn the Secrets your Banker doesn't want you to Know.
Student Home Purchase Plan
Tuition costs are climbing, housing costs are climbing, it seems like all the costs for students are climbing these days. Students can afford cost increases less than any other demographic in Canada. Because of this, parents and students alike are looking for new ways to offset the costs of education.
Bad Credit Home Equity Loans
A home equity loan allows you to borrow against the equity you have built in your house. Even if you have no equity, you may be able to borrow up to 125% of the value of your home. You can use the extra cash to consolidate bills, fund college tuition, or any other reason you see fit. If you have bad credit, you can still apply and be approved for a home equity loan. Mortgage lenders are offering great interest rates and easy terms on home equity loans, even if your credit history is less than perfect.
I Have A Slice of the American Dream and It is a 30 Year Nightmare
Well, we did it. We are buying a beautiful, brand new house, planning our wedding, and getting ready to move. The cramped trailer we have lived in will just be a memory. The house we are buying is a 4 bedroom, 2 1/2 bath, 2 car garage slice of the American Dream.
Understanding Mortgage Basics
As common as mortgages are, there are a surprisingly large number of us who are under false impressions about the way they function, and what they actually are. For one thing, though we do commonly call mortgages "home loans," this is not at all what they actually are. In fact, mortgages aren't loans at all, nor are they something that have been given to you by lenders. More accurately, it is a security instrument that you have provided to a lender. It is a document that protects your lender's interest with your property itself.
How Homeowner Can Save Their Home From Foreclosure
Drive around and see how many signs you see that says House for Sale. How many lease purchases do you see? How many abandon houses are on your street? Our country is up against the wall with delinquence mortgages. FHA mortgage lenders are filing claims in the millions from HUD. How do I know? I counsel homeowners every month concerning their mortgage and what they need to do to protect their property and communicate with their mortgage lender.
Tips for Finding the Best Agri Mortgage and the Best Agri Loan
The Research Rates of Agri Mortgage
Home Improvements Turn Average Homes into Dreams Come True
If you're thinking about taking out a home improvement loan, there are several options to consider. First and foremost, your mortgage consultant needs to know why you want a home improvement loan. Here are some factors to take into consideration.
Refinance Your Second Mortgage
A 2nd mortgage is a secured loan on your property, with your home serving as collateral. Depending on the particular terms of your second mortgage, you could be able to refinance if you wish to reduce your monthly payments or are in need of extra cash. Refinancing a 2nd mortgage can be an option for those who want to pay off their mortgage (excluding any home equity lines of credit), reduce the interest rate they currently pay on their second mortgage, or simply want reduce their monthly payments. Refinancing a 2nd mortgage can also be an option if the homeowner wants to pay off the mortgage, including home equity lines of credit, and receive cash.
Refinance Home Loan and Refinance Home Loans
Refinance home loan lenders are eager to lend money to any individual regardless of credit as long as the homeowner has a fair amount of equity in the home and the home itself is in a condition that can be resold. Refinance home loans are different than a second mortgage or line of credit in that the proceeds from the loan disbursement first pay off the original mortgage loan. The remainder of the refinance home loan proceeds leaves the homeowner to spend the money as they wish. Typically, refinance home loans carry lower interest rates than purchase mortgages.
What is a Repayment Mortgage?
A repayment mortgage is the type of mortgage that most people think about. The idea behind a repayment mortgage is that you pay monthly for a set period and each payment consists of an element of capital and interest.
Reverse Mortgages: Information You Need to Know
Reverse Mortgages are exploding in popularity and as the baby boomers reach age 62 and beyond they will become eligible to cash in on their home equity with a reverse mortgage.
Option ARM ? The World?s Most Dangerous Mortgage
Home prices have reached record levels, and in many parts of the country, homes have become nearly unaffordable. Real estate has replaced the tech stocks of the late 1990's as the hot investment, and everyone has sold their stocks and jumped into investment property. Real estate prices have increased at a far greater rate than salaries, and the lending industry has attempted to solve this problem by introducing a tremendous number of mortgage options for borrowers who barely capable of purchasing a home. Most of these loan types feature adjustable interest rates and minimum down payments. One of these, the option ARM, is the most dangerous type of loan ever introduced. Borrowers who are considering an option ARM should be aware that this loan could leave them with a loan that is worth far more than the home it's used to buy and with a loan that he or she cannot afford to pay. The option ARM is not for the squeamish.
Mortgage Elimination- A Horrible and Sure Way to Lose Your Home to Foreclosure
"Own your home free and clear in 3 to 4 months. Note paid in full!"
How a Commercial Mortgage Can Help Your Business
A commercial mortgage or commercial remortgage is a business loan which is secured against a commercial property.
How Much Home Loan Can I Afford?
Have you ever asked yourself how much home loan can I afford? If you know how much of a payment you qualify for before shopping for a home, your purchase will go much smoother and it can save you a lot of headaches.
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