Your
Metairie home is your castle, sure—but it’s also a great deal more than that. In
addition to being the place where you relax after work, spend time with family,
and generally live your life, it’s also the most substantial investment most
people ever make. Much of its prominence is due to the many advantages homeownership
brings in the personal financial realm.
In addition to the ongoing tax savings its
mortgage provides, it’s the home equity—the difference between market value and
the amount owed—that’s such a valuable contribution. A Metairie property’s
equity adds considerable financial flexibility in the form of easily obtainable
home equity loans.
That’s how your Metairie home can be the enabler
for financing key life events—important undertakings like college, home
improvements, or major debt consolidation. It’s a mainstream activity, and one
that’s growing in popularity. Credit reporting firm Equifax tells us that the
number of home equity loans have increased by 16.1% over last year; home equity lines of credit, 21.4%.
But
at the same time, it’s the ease with which home equity financing can be arranged
that should be cause for caution. Before anyone takes advantage of this kind of
financing, they should clearly consider what they are getting into, the better
to decide when and when not to make use of it.
There
are two forms of home equity credit—the home equity loan (HEL), and the home
equity line of credit (HELOC). HELs are straightforward loans, created and
retired when you take a one-time, lump-sum of cash, then pay it back, with
interest, over time. HELOCs work more like credit card accounts. You are
approved for a line of credit with a top limit, and you can spend as much as
you want until you reach the limit. You may use it or not as you wish. In fact,
with most HELOCs, you're actually issued a credit card or checkbook to use as you
see fit.
Deciding
when home equity financing is appropriate is an individual decision, but a
conventional rule of thumb is that it is usually best reserved for single
events. One good use is for home improvements, since they actually add equity
to the underlying collateral. Another is for debt consolidation when it has the
effect of lowering monthly interest outlays.
When
are Metairie home equity loans not a
good idea? For one, if you don't need a lot of money, since opening a HEL or
HELOC might involve closing costs and other fees, make sure it makes financial
sense. And always look to the future. Since failing to make timely payments can
actually force the sale of your home, any time you are less than certain your
cash flow will support repayment, better look for other forms of financing.
Your Metairie home is a castle worth protecting; you want to be sure that you
are the single voice to say if and when a move is in order.
And
of course, whenever you are
contemplating a major move, give me a call!
Happy Holidays
from
Terez Harris NOLA Realtor Group!
Questions about buying or selling a home?
Call Terez B. Harris
504.297.2619
View Homes For Sale in Metairie
View Homes For Sale in New Orleans
Terez B. Harris
Terez Harris NOLA Realtor Group
Terez Harris NOLA Realtor Group
(504)297-2619
www.TerezHarris.com
TerezHarris@kw.com
Search the MLS!
(multiple listing service)
Search Terez's Active Listings!
TerezHarris@kw.com
Search the MLS!
(multiple listing service)
Search Terez's Active Listings!
Terez B. Harris Terez Harris NOLA Realtor Group 504-297-2619 www.TerezHarris.com
Keller Williams Realty New Orleans 8601 Leake Ave. New Orleans, LA 70118 504-862-0100
Keller Williams Realty New Orleans 8601 Leake Ave. New Orleans, LA 70118 504-862-0100
Each office independently owned and operated. All brokers and agents licensed in the state of Louisiana.
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