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BUSINESS
By Andrew Leckey | October 14, 1994
Financial flexibility is a wonderful thing, so long as you don't hang yourself with it.Use of home equity lines of credit is on the rise, now encompassing one out of every 12 American homeowners. Heavy promotions offering special deals to sign up should push that figure higher.Borrowers have grown accustomed to this ready source of cash. So much so that 62 percent of the available credit from the nation's home equity lines is currently loaned out, according to a consumer survey by the University of Michigan.
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BUSINESS
By Ilyce Glink | September 28, 2008
I wish to refinance my rental property (a townhouse). I have been advised that doing a cash-out refinance isn't possible in today's climate, and that if I want to take cash out of the transaction, I have to refinance using an equity loan. I asked if federal or state law required me to refinance this way, but I've received no definitive explanation. Can I refinance to take money using an equity loan? The current credit markets have made it difficult to finance rental property - even if you have a large amount of equity in the deal.
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BUSINESS
By James M. Woodard and James M. Woodard,Copley News Service | March 15, 1992
The temptation to obtain "quick and easy money" from a home equity loan is particularly strong during these days of continuing recession. But caution and careful investigation should precede a decision to sign those mortgage papers.The current wave of equity loan applications is generating a lot of profit for mortgage companies. But it's not always in the long-term best interest of the borrower.I recently received loan-promotion letters from two mortgage companies. One said I could obtain cash from the equity in my home to be used for any reason.
NEWS
By Laura Smitherman and Laura Smitherman,Sun reporter | March 12, 2008
The Maryland Senate gave preliminary approval yesterday to a bill that would allow state-chartered banks to continue to offer a type of home equity loan the state's highest court previously ruled was in violation of consumer protection laws. Sen. Thomas "Mac" Middleton, chairman of the Finance Committee, said that the court had erred in its ruling and that the legislature often steps in to clarify the law. The Senate might take a final vote on the bill this week; the House of Delegates unanimously approved similar legislation last week.
BUSINESS
By New York Times News Service | May 30, 1993
Rising interest rates, reflecting worries about inflation, may force into action homeowners who have held off refinancing mortgages in hopes of catching the low point of the interest-rate cycle. One idea to consider is replacing a conventional mortgage with a fixed-rate home-equity loan. This could allow a borrower to lock in some of the best rates in two decades while saving a few thousand dollars in closing costs.xTC "It's a good way to trade in higher interest-rate debt for lower-cost debt with limited out-of-pocket expenses," said Keith Gumbinger of HSH Associates, a mortgage information service in Butler, N.J. The typical cost of refinancing a mortgage is about $3,500, Mr. Gumbinger said.
BUSINESS
By John Schmeltzer and John Schmeltzer,Chicago Tribune | March 22, 1992
CHICAGO -- Walk by virtually any bank and at least one window display will be hawking that institution's version of the home equity loan.If you don't like walking, you can wait for the Postal Service to arrive at your door with one of the more than dozen of preapproved lines of home equity credit in amounts of $5,000 and up.It's hard to avoid the ads if you're a homeowner. Most financial institutions offer no fee applications and appraisals and promise quick approval if you qualify.And because the interest paid on a home equity loan up to $100,000 is tax deductible, homeowners have flocked to lenders, even in these days of a poor economy, to consolidate their credit card, auto, personal, college tuition and other unsecured loans into tax deductible debts.
BUSINESS
By Andrew Leckey | August 11, 1995
More debt more easily.That's what many banks touting home equity lines of credit seem to be saying in 1995, acknowledging the fact that they must work harder to gain business because the growth of such loans has hit a plateau in the 1990s.The problem has been that housing values in many parts of the country dropped. In addition, many homeowners became preoccupied with mortgage refinancing instead.There is, however, finally some indication of an increase in home equity lending this year, based on an annualized gain of 12.5 percent in the past quarter.
BUSINESS
By Kenneth R. Harney | November 28, 1999
IF CONGRESS wants evidence about how federal tax policy can transform consumer behavior, it need look no further than a forthcoming report on the current state of the American home equity loan.Whereas barely 30 years ago second mortgages were considered a backwater of consumer credit, aimed primarily at people who had no other way to raise cash, today they are a product for the creme de la creme: Home equity borrowers have higher incomes than the average American household, they pay much less for their credit than people who take out ordinary consumer loans, and they default on their obligations at a very low rate.
BUSINESS
By Ilyce Glink | September 28, 2008
I wish to refinance my rental property (a townhouse). I have been advised that doing a cash-out refinance isn't possible in today's climate, and that if I want to take cash out of the transaction, I have to refinance using an equity loan. I asked if federal or state law required me to refinance this way, but I've received no definitive explanation. Can I refinance to take money using an equity loan? The current credit markets have made it difficult to finance rental property - even if you have a large amount of equity in the deal.
BUSINESS
By MICHAEL J HIMOWITZ | October 26, 1992
With interest rates at their lowest levels in decades, millions of homeowners are thinking about refinancing their mortgages. Unfortunately, refinancing raises a lot of sticky, "if-then" questions that many of us are hard put to answer.For example, if you have a 30-year mortgage, should you refinance over the same term with lower payments? Or should you switch to a 15-year mortgage, which could get you out of the loan much sooner?If you're already seven or eight years into a loan, does it pay to refinance, just apply an extra payment toward principal each month?
NEWS
By Laura Smitherman and Laura Smitherman,Sun reporter | February 2, 2008
A key state lawmaker is working with the banking industry's trade group on legislation that would reverse a Maryland Court of Appeals decision prohibiting certain penalties for borrowers who pay off home equity loans early. The case involved a popular loan program at Provident Bank that enabled borrowers to tap into equity in their homes without paying closing costs as long as they kept the loan for at least two to three years. Maryland's highest court ruled late last year that recouping the closing costs if a consumer refinances or pays off the loan before then amounts to a "prepayment penalty" that's not allowed under state law. Banking industry officials say that without a guarantee that borrowers will pay interest on home equity loans for at least a few years, they can't afford to offer no-closing-cost products, making borrowing more expensive for consumers.
BUSINESS
By Lorene Yue | May 23, 2004
It wasn't long ago that an unexpected or unusually large expense -- say a roof in urgent need of repair or a looming tuition bill -- meant a visit to the loan officer of the local bank. But these days more people are finding a new financial resource that's easier and cheaper -- themselves. "A bank is going to ask you for collateral," said Denny Cummings, who works for Merrill Lynch in Chicago. "The way they loan you money without collateral is a credit card, and the interest rate on that is not favorable."
BUSINESS
By James Gallo and James Gallo,SUN STAFF | May 2, 2004
A new kind of home equity loan has emerged in Maryland that provides cash based on the future value of a house undergoing renovations. The Aberdeen Proving Ground Federal Credit Union began offering a home equity renovation loan in March. The company, which has offices in Harford and Cecil counties, says it is the first lender in Maryland to offer such loans, which have been offered on the West Coast for about two years. Americans spent $130.4 billion remodeling their homes last year, 7 percent more than in 2002, according to a study by the Joint Center for Housing Studies at Harvard University.
BUSINESS
By MATT LUBANKO | March 21, 2004
I HAVE a home equity loan with a balance of around $35,000. Can I deduct the interest from this loan? And does the claim of this deduction in any way depend on how I used the money I borrowed? - J.B., Baltimore To be considered deductible, the Internal Revenue Service says, home equity loans must be secured by your home, taken out after Oct. 13, 1987, and not be so-called "home acquisition debt," which we will explain below. If you meet those three requirements, then the question becomes how much interest on the loan you can deduct.
BUSINESS
By Liz Pulliam Weston and Liz Pulliam Weston,SPECIAL TO THE SUN | June 22, 2003
American homeowners owe nearly $1 trillion on home equity loans and lines of credit, according to SMR Research, and they borrow an additional $100 billion each year through cash-out refinancings. This wave of borrowing has serious repercussions for homeowners' financial health, so this week's column is devoted to dealing with home equity and debt. I've used up all equity in my home to pay off credit card debt, but now my credit card debt has grown again to $40,000. I have $49,000 in a 401(k)
BUSINESS
By Jeff Brown and Jeff Brown,KNIGHT RIDDER/TRIBUNE | April 6, 2003
I would like to refinance my adjustable-rate mortgage to lock in one of today's low rates. But I don't want to pay a lot of fees for a new mortgage that would actually make my monthly payments bigger over the next year. Refinancing would cost thousands, for a loan of only about $80,000. What should I do? You might consider a home equity loan instead of an ordinary mortgage. Many home equity loans are unusually attractive now. Yours is a dilemma that confronts many homeowners with adjustable mortgages, or ARMs: They may be happy with the low interest rates they're paying today - in many cases only 4 percent or so - but they worry their rates will rise in the future.
BUSINESS
By ELLEN JAMES MARTIN | July 18, 1993
The Carney townhouse featured designer draperies, marble kitchen tile, brick patios off the back and fancy landscaped gardens. The property, owned by a wallpaper wholesaler, was exceptional in many ways -- including its price tag.Priced 10 percent higher than other homes in its Satyr Woods community, the property was spurned by buyers for several weeks -- until it caught the fancy of a divorced mother of a teen-age son.Pleased at both the home's style of...
BUSINESS
By Lorene Yue | May 23, 2004
It wasn't long ago that an unexpected or unusually large expense -- say a roof in urgent need of repair or a looming tuition bill -- meant a visit to the loan officer of the local bank. But these days more people are finding a new financial resource that's easier and cheaper -- themselves. "A bank is going to ask you for collateral," said Denny Cummings, who works for Merrill Lynch in Chicago. "The way they loan you money without collateral is a credit card, and the interest rate on that is not favorable."
BUSINESS
By Patricia V. Rivera and Patricia V. Rivera,SPECIAL TO THE SUN | January 26, 2003
A growing number of consumers are choosing to use the equity in their home as collateral for credit, allowing them to do anything from consolidating debt to paying a child's college tuition to funding a trip to Tahiti. If they are not careful, however, what seems like a safe asset could turn into anything but that, experts said. Homeowners could end up losing their home if they can't make the payments. "It's become too easy to deplete the best piggybank available right now, which is your home," said Keith T. Gumbinger, a vice president of HSH Associates, a financial publisher in Butler, N.J. The appeal of home equity loans is easy to understand.
BUSINESS
December 31, 2000
As home equity loans have gained popularity among Americans, the National Home Equity Mortgage Association has offered a number of guidelines for borrowers to follow. They include: Borrow within your income and budget: A home equity loan is a major financial undertaking. Borrow for necessities or to take advantage of lower interest rates: NHEMA does not recommend taking a home equity loan to finance a luxury item or trip. Don't refinance too frequently: Refinancing a home loan can mean additional closing costs and fees.
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