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In this book, we will explore different reasons why some real people took out a line of credit and how it worked to help them. We will also talk about the difference between a line of credit, a home equity loan and a home improvement loan and why a line of credit works best for you. We will also talk about other ways that you can use a line of credit to help you as well as the difference between a secured line of credit and an unsecured line of credit. We will even discuss how business owners can use a line of credit to benefit them and their business. If you have ever wondered about different borrowing instruments and how they can work for you, you are in for a treat with this book.
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Veröffentlichungsjahr: 2014
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How to Get a Line of Credit
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Copyright © 2014 by Noah Daniels
Introduction
The residential housing market has plummeted in recent months and is going to stay where it is for a while. For this reason, now is not the time to sell your home. However, this is the perfect time to make improvements on your home.
Making home improvements is like putting money in the bank. Certain improvements will add instant value to your home. When the housing market gets back on its feet, as it always does, you will have a fully improved home that you can sell for a profit.
Today we are in a buyer’s market in the housing industry. This means that there are more homes on the market than there are buyers. When supply is greater than demand, it makes the prices go down. This is what we are seeing in today’s residential home market through much of the United States.
Making home improvements on your home really makes good sense. Despite the fact that the homes on the market are not selling, the loan interest rates are lower than ever. You can take out a line of credit for the equity that you have in your home and use that cash to do a number of different things, including make home improvements in your home.
In this book, we will explore different reasons why some real people took out a line of credit and how it worked to help them. We will also talk about the difference between a line of credit, a home equity loan and a home improvement loan and why a line of credit works best for you.
We will also talk about other ways that you can use a line of credit to help you as well as the difference between a secured line of credit and an unsecured line of credit. We will even discuss how business owners can use a line of credit to benefit them and their business. If you have ever wondered about different borrowing instruments and how they can work for you, you are in for a treat with this book.
There are many different reasons why someone would choose to take out a line of credit. For the most part, they are easy loans to get and are very flexible. While many people choose to get a secured line of credit against their homes, others choose to get an unsecured line of credit in order to borrow cash. A line of credit is a better way to borrow money than using a credit card and usually has a much lower interest rate.
Because of the real estate market today, many people are opting to make home improvements rather than try to sell in a depressed market. Home improvements can be expensive - getting a loan based upon your home equity and secured against your home can give you the cash that you need to make costly home improvements when you need it, at a low interest rate.
If you are a homeowner with equity in your home, you should consider taking out a line of credit against the equity for a number of different reasons. There has never been a better time than now to allow your current home to work for you.
What Is Equity?
You have probably heard about equity and wondered what this term meant. Equity is the amount of money that your home is worth less any amount that you owe. This means that if your home is worth $200,000 and you owe $100,000 on the home, you have $100,000 sitting in equity. You can borrow against this money in a number of different ways. You can take out a home improvement loan, a home equity loan or a line of credit.
Most banks or lenders will only lend you up to 80 percent of the equity that you have in your home. Some will actually lend you 100 percent. This all depends on the banks or lending institutions, so be sure that you shop around for the best deal.
If you have equity in your home, it may actually diminish over a period of time if the housing industry gets worse. This means that the home may be worth $200,000 today, but in a few months, may drop down to $190,000. You have lost $10,000 in equity.
Equity in your home is only of value when borrow against it or if you go to sell your home. It is not tangible unless it is used for a purpose. There are hundreds of different ways that you can use your equity to allow your home to work for you.
In order to figure out just how much equity that you have in your home, you need to figure out how much money you owe on your property. This includes both first and second mortgages. After that, you have to figure out how much your home is worth in today’s market.
The amount that your home is worth is determined by the amount in which similar homes in your area have sold. You cannot go by the listed price as this is merely a suggested price. You have to figure out what the homes actually sold for.
In order to do this, you can go up to your county recorder’s office and ask to see deed records for your area. You can also find this information out at the county assessor’s office. The sales price of any property is public knowledge.
The easiest way to determine your home equity is to get a real estate agent to give you a free evaluation of your home. They will be able to give you comparables, which is what the other homes in the area have sold for, and give you a good determination of what your home is worth on the market today. Keep in mind that this figure is not set in stone and can change. It can go up or down depending on the market.
Once you have figured out the amount that your home is worth (a ballpark figure) and how much you owe, you can subtract the amount due from the worth and come up with your equity. Figure out 80 percent of that amount and you have the money which most banks will lend you if you want to get a line of credit or home equity loan.
There are different reasons for getting different types of loans. You will, in fact, be putting a second mortgage on your home and using the equity in your home as collateral. If you default on your loan, the bank can force you into foreclosure.
You should not allow this to stop you from using your equity in your home, however. Remember that the equity is only good if it is being used. If you have $100,000 in equity in your home and it is just sitting there, it is not working for you, Now is the perfect time to put that money to work so that you can eventually make more money when the housing industry rebounds.
