For many families, home equity loans have become a popular way to borrow money.
Last year, consumers used the equity in their homes to borrow nearly $300 billion, up from about $79 billion in 1984. The reason is simple: The interest on home equity loans is 100 percent tax-deductible in most cases.
But there is an ominous side to this trend, says the Credit Union National Association, a trade group in Madison, Wis. As the economy stalled and jobs were lost, some people began having trouble repayingthe loans. Therefore, the delinquency rate on home equity debt is rising at a time when it is falling for other types of loans.
Home equity loans can be an excellent way to borrow, but consumers should exercise caution.
"Don't borrow if the loss of your job or your spouse's job would endanger your ability to repay the loan," said Bill Hampel, chief economist at the credit union association.
For a free brochure, send a stamped, self-addressed envelope to Home Improvement Loans, CUNA Public Relations, Box 431, Madison, Wis. 53701
Tom Brokaw and Peter Jennings were named best nightly news anchors by Americans with $100,000 or more in savings and investments. Each got 22 percent of the vote. But Dan Rather was tops with those who have $10,000 to $100,000. For those with less than $10,000, Mr. Brokaw rules, with 27 percent.
The numbers were taken from a "Life in America" survey conducted by Shearson Lehman Bros.