Texas Home Equity Loan - Selected Resources For Texas Home Equity Loan

Texas Home Equity Loan Resources

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The Power of a Home Equity Loan to Pay Down Debt
By Jakob Jelling

Households across the country are finding themselves in a similar situation. They lack the financial funds to make the necessary changes to their home and need to find a way to fund upgrades and eliminate debt. A popular way of financing these changes without killing themselves is by taking a home equity loan to pay down their debt.

The Home Equity Loan has become a fast-track way of paying down large credit card debt, financing college education and even taking a vacation. Since the stock market has lost quite a bit of appreciation, people have been purchasing homes as a means of investment, thus sending housing prices through the roof. With higher prices comes a great deal of appreciation in the home. People who have found themselves in 20 – 30 thousand dollars in debt can pay it down by taking a home equity loan. Home Equity Loans have been a source of relief and flexibility to get the homeowner out of debt and moving forward in life.

The home equity tax shelter

The greatest benefit from taking a Home Equity Loan is being able to crush debt, but also reduce the amount you owe the government every year. Most loans by design do not provide any tax relief, whereas a Home Equity Loan provides a direct line item to reduce your debt. To figure out your home equity value you can hire a professional appraiser to come out and tell you how much it is worth to a bank or financial institution. Once you have that figure you can easily find out how much equity you have in your home. For example, should your home appraise for $150,000 and you owe $ 60,000 you have $90,000 in equity. This equity will not become a taxable event should you buy a bigger home and spend more money. Should you step down in your home, you can be penalized for the difference, provided that you have not already taken the one-time exemption allowed by the government.

Debt relief

Once you have found out how much your home is now worth, it is time to apply for the loan. During the loan process you can bring your credit card statements as well as any other debts you may owe to the table. Explain to the loan officer your situation and ask that these debts also be included in the Home Equity Loan. If your home has at least 40% equity in your property you should have no problem getting them dissolved into the loan. There are many reputable lenders who will help you find the right loan for you. The Home Equity Loan will restart the 15 or 30-year clock from day one. Your payment may increase or decrease depending on how much debt you add or cash you take out of the property.

About The Author

Jakob Jelling is the founder of http://www.cashbazar.com. Visit his website for the latest on personal finance, debt elimination, budgeting, credit cards and real estate.

Article Source: http://EzineArticles.com/

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Change in Texas Law May Make Reverse Mortgages More Popular
By Charles Essmeier

Texas was one of the last states to allow homeowners to take out home equity loans. Laws going back to the nineteenth century strictly prohibited home equity lending, as legislators feared that unscrupulous lenders would take advantage of homeowners for the purpose of seizing their homes through foreclosure. This made it impossible for citizens of the Lone Star State to use their equity for home improvements, debt consolidation or paying medical bills, as homeowners in other states may do.

In 1997, the Texas constitution was amended to allow homeowners to borrow against their home equity. The amendment allowed for traditional term loans, lines of credit, and reverse mortgages, but did not allow a line of credit on a reverse mortgage.

In a reverse mortgage, owners of homes who are at least 62 years of age may borrow against the equity in their home. They need not pay the money back until they die, move or sell the home. Reverse mortgages have become quite popular in the last few years, especially in areas like California, where homeowners may be cash poor but may have a lot of equity in their homes. Nationally, nearly 90% of homeowners who take out a reverse mortgage do so with a line of credit. In Texas, however, the only options are a lump sum or monthly payments. There are several advantages in taking a reverse mortgage in the form of a line of credit, rather than a lump sum. The most significant is the fact that interest is only due when money is actually drawn from the credit line. This saves the homeowner substantial amounts of interest over the life of the loan when compared to a lump-sum payout. Reverse mortgages have been quite popular in Texas since the law was changed to allow them, but lenders say that the demand should increase substantially if lines of credit are allowed.

The Texas Legislature has recently approved a constitutional amendment that will allow lines of credit.for reverse mortgages, and this amendment is expected to be on the ballot in Texas this fall. This bill is expected to pass easily, and once it does, Texas may become the leading state in the country for issuing reverse mortgages.

Charles Essmeier is the owner of Retro Marketing, a firm devoted to informational Websites, including End-Your-Debt.com, a Website devoted to debt consolidation information and HomeEquityHelp.net, a site devoted to information on home equity loans.

Article Source: http://EzineArticles.com/