Which Home Equity Loan is Best for You?

Deciding which home equity loan is best for you depends on two things:

Do you want to receive your money in one lump sum?

What do you need to use the money for?

There are three ways to turn your home equity into usable cash:

1. Cash-Out Refinance

When you take a cash-out refinance, it means you're refinancing your existing loan to a larger amount than what you owe and taking the difference in cash. You receive your money in a lump sum and you might use the cash for home improvements or debt consolidation. If the mortgage interest rate on your existing home loan is higher than current rates, it may make sense to refinance this way.

2. Home Equity Loan


If you have a great mortgage interest rate and don't want to refinance your existing mortgage, a home equity loan might be the way to go. A home equity loan is a second loan that you take out in addition to your first mortgage . It allows you to get cash from your home equity.

A home equity loan takes less time than refinancing your first mortgage and is a good choice if you'd like your cash in a lump sum. Again, you might use this for home improvements or paying off high-interest credit card debt. You might also use it to pay medical bills or finance a second home.

3. Home Equity Line of Credit

A home equity line of credit (HELOC) is different from the first two options. It works similar to a checking account or credit card except that it uses the equity in your home as the revolving line of credit. You pay only if and when you use the money. But, unlike credit cards, the interest is usually tax-deductible.*

With a home equity line of credit, you have the choice of getting a lump sum at closing or only part of your money and drawing on the rest when you need it. Unlike a home equity loan or a refinance, you can get a home equity line of credit in as little as ten days.

A home equity line of credit can be a good choice if you need to access your money more than once, like when you're renovating your house and need to pay different contractors at separate times.

If you'd like to know more about choosing the right home equity loan, call us at 800-251-9080 to talk to a Quicken Loans Home Loan Expert.

* Please consult your tax advisor.

Via quickenloans.com

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Nine Reasons Why Property Taxes Increase

By Greg Mischio

Ask any homeowner, and he'll tell you that property tax bills always seem to rise. Yet, when you consider the sheer number of factors that can spark a change, you should probably be thankful that there aren't even more property tax hikes.

As a physicist, Sir Isaac Newton was right when he said, "What goes up, must come down." But if he had been an economist, he would've been making a grave mistake, because property taxes defy the laws of gravity. Taxes paid on privately owned property at different time periods during the year, are based on a combination of local tax rates and assessed property value. However, as you'll see from the list below, there are a number of other factors that can cause an increase.

1. Valuable property. Most municipalities tend to reassess a home's property value over a period of time, generally five to 10 years. An assessor could visit you even sooner if you've made sizable home improvements to your property, especially if you've added square footage.

2. Keeping up with the Joneses. The overall value of property in your district may increase, causing everyone's tax to increase. This can be caused by new local construction, such as the addition of new homes.

3. Government interference. Your state legislature may decide to increase overall property taxes.

4. The levy isn't dry. The city, township, or county's budget levy may change. Each of these government entities can review the "discretionary spending" in their budgets and decide that they need more funding.

5. Blame the kids. If your state funds its schools through property taxes, your school may request more money to keep itself operational. Taxes on homes can account for a significant portion of a school's budget.

6. Who's special? Special districts, including hospitals, drainage, and watershed, are unique entities that can draw on property taxes if they need to increase their budgets.

7. Neighborhood upgrades. Improvements made by your municipality, such as new sidewalks or curbs, may warrant additional funds, triggering a special assessment for the tax rolls.

8. Give us the money. On occasion, local government projects are required to be funded through a special referendum, such as the building of a new library, school improvements, etc. These may require significant operating costs.

9. Blame it on the Fed. It's not uncommon for federal legislators to pass an unfunded mandate that local governments are required to implement. Federal and state authorities may also revise their aid formulas for local governments.

Property tax increases often require a great deal of political will to enact. But as any property owner will tell you, where there's a will, there is a way. For that reason alone, it appears that property taxes will forever frustrate the likes of Newton and continue their gravity-defying act.


VIA : www.mortgageloan.com

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Are Certificates of Deposit Good Investments?

By Nicki Howell

Nobody wants to work forever. But the only way people can stop working is to either win the lottery-an unlikely prospect-or have enough money saved for retirement. Unfortunately, saving isn't enough. The money that you accumulate must be invested wisely in order for it to grow into a comfortable nest egg.

There's no doubt that stocks have been the best performing investment over the long term. However, there's a high degree of risk involved with putting your money in equities. If you don't balance the risk with a safer vehicle, you could see your nest egg cracking during periods of down markets.

In order to protect your money, you need to balance your portfolio with an investment that guarantees that you'll make money. For that portion of your portfolio, certificates of deposit (CDs) are a great tool. They offer competitive rates of return, and are federally insured up to $100,000.

Tips for purchasing CDs
Here's a guide for adding CDs to your portfolio:

1. Identify your investment goals. First, decide how soon you'll need your investments for living expenses. Evaluate both current and future needs. If you have many working years before retirement, you can safely choose a longer term CD. On the other hand, if retirement is around the corner, consider the shorter-term instrument.

2. Avoid early withdrawal penalties. Review CD terms before purchasing. If funds are withdrawn before maturity, you'll generally pay a penalty. Think twice before opting for early access to your money.

3. Be aware of automatic rollovers. Some CDs have an automatic rollover policy. This means that, if you don't request action, your CD will automatically rollover into a new one, and you'll be locked into an interest rate that you may not want. If you keep track of maturity dates, you can make sure that you get the best CD rates available when you purchase anew.

4. Choose the longest term you can afford. As a general rule, longer terms pay higher CD rates. Choosing the longest term you can afford will help you earn more.

5. Let your interest compound. As the saying goes, time is money. This is particularly true with regard to the length of time that you keep your assets invested. If you don't need the interest income now, continue to reinvest. This will ensure the growth of your savings.

6. Keep your short-term needs in a liquid CD. A traditional savings account won't pay as much as a CD. If you're close to retirement and need easy access to your money, consider liquid CDs. Rates are competitive and access to your money is easy. Invest the rest of your funds in regular CDs to maximize your earnings.

Use safe investment vehicles, such as CDs, to protect yourself from market risk. While they don't offer double-digit returns, they do offer consistent gains and, most importantly, no losses. That's why they're a great investment, and should be considered as a part of any well-diversified portfolio.


VIA : www.mortgageloan.com

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