Paying for college tuition or a wedding? Paying for high-ticket items or expenses for education is another popular use for a home equity line of credit. Because a home equity line of credit is secured by your home, it's often easier to get than an unsecured personal loan, and carries a lower interest rate. Add to those advantages the fact that the interest on mortgages on your primary residence is tax deductible, and that includes a home equity line of credit up to $100,000. Not only do you get a lower rate of interest when you pay for high ticket items with a home equity loan line of credit, you get to deduct the interest on your taxes.
You can also use a home equity line of credit to help you get through tough times like an illness or a period of unemployment. While many people turn to the equity in their home to cover medical bills or everyday expenses during unemployment, financial experts warn that it can be risky. Because a home equity loan of credit is secured by your home, home equity debt won't be forgiven if you file for bankruptcy. You could end up losing your home with the proceeds going to pay off your debts.
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