Equity loans through Caliver Beach make life’s expenses a little less expensive with a tax-friendly & low-interest, payment.
Every year, people have to pay property taxes based on the value of their home — not just on what they owe, but on the equity, too. Caliver Beach can help you make that equity pay you back through a home equity loan.
- The Advantages of a Home Equity Loan
- Common Uses for Home Equity Loans
- Three Types of Home Equity Loans
- Choosing the Loan That Is Best For You
We have 47 different lenders that allow us to customize our mortgage plans to suit many different customers in different financial situations.
The Advantages of a Home Equity Loan
If you have a large expense or high-interest debts a home equity loans could be your best choice. When you borrow against the equity you have in your home, the interest rates are usually much lower than other types of loans. Another advantage to home equity loans is the fact that the interest may be written off on federal income taxes. Consult your tax advisor.
Common Uses for Home Equity Loans
Most people use home equity loans to consolidate existing debts, such as credit cards or other loans. Another option with a home equity loan is that it can be used to make home improvements. These aren’t the only reasons to get a home equity loan. Sometimes they’re used to pay large expenses like college tuition or to fund a vacation.
Three Types of Home Equity Loans
There are three ways to utilize the equity in your home:
- by refinancing your first mortgage and taking advantage of your equity possibilities (e.g., a debt consolidation program or cash out option);
- by adding a home equity loan, and leaving your first mortgage in tact;
- by opening a home equity line of credit.
By refinancing, you shift debt from various bills (with all the different rates, payments, and due dates) to one lender at a lower interest rate with a fixed repayment plan. You can create a tax benefit by consolidating payments and payment dates through refinancing. Consult your tax advisor. You’ll have the benefit of paying a lot less interest, not to mention the cash you’ll save by making the interest expense tax deductible.
Home equity loans
A home equity loan is a second mortgage with a fixed amount to be paid off over a predetermined term, usually 15 years.
Home equity line of credit (HELOC)
A home equity line of credit (or “HELOC”) is like a bank account where you continue to write checks, backed by the equity in your home. A HELOC does not have a fixed period in which it will be paid off, because you can continue to borrow against it, similar to a credit card.
Choosing the Loan That Is Best For You
There are a lot of factors that go into choosing the right home equity loan, mostly it depends on your unique financial situation. Call Caliver Beach to learn more about these programs as they relate to your loan profile.
Given the option, accessing your home equity is best through refinancing your first mortgage. However, if your first mortgage is fixed at an extraordinarily low rate, you might want to leave it and take advantage of a home equity loan or a HELOC. The two loans are often confused, but the home equity loan has several advantages.
Home Equity Loan Versus the HELOC
With a home equity loan, you know what the monthly payments will be for the term of the loan. With the HELOC, the payments will fluctuate, depending on how much is borrowed and repaid.
Most home equity loans carry a fixed interest rate rather than a variable rate, which is standard for HELOC’s.
The HELOC is a lot like a credit card account, except the debt is secured by your house. If you’re using your home equity to pay off debt, you might not want such flexible and easy access to your home equity.