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| paula0000 |
 Posted: Sun Feb 20, 2005 3:47 pm Post subject: Line of credit |
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Investing Manager
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| Our mortgage is actually a line of credit. It works well for us as our business is seasonal. In the summer, when times are good we can pile money onto the LOC with no penalty. In the winter when times are leaner we can stick with a manageable payment. |
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| kimber |
| Posted: Tue Feb 22, 2005 5:26 am Post subject: |
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Investing Associate
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| Line of credit is the best as you have a lower monthly payment on your credit as your rate is usually prime. |
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| wallace6 |
| Posted: Fri Feb 25, 2005 2:53 pm Post subject: LOC |
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Investing Sr. Associate
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| The only serious drawback I can see is that the interest rate is usually higher than a mortgage. |
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| JoiseyFamily |
| Posted: Fri Feb 25, 2005 5:19 pm Post subject: |
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Investing Associate
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| It would depend what the base the rate on. My LOC was prime + 0, so when interest rates are low, it is a very good deal. |
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| alicia gist |
| Posted: Thu Mar 03, 2005 1:52 pm Post subject: |
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Investing Sr. Associate
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| How do you get a line of credit? Is in similar to interest only loans? |
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| eggdrunk |
| Posted: Fri Mar 11, 2005 10:41 am Post subject: |
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New Poster
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There are fixed or ARM mortgages that does not assess pre-payment penalty. You just write your mortgage a check for the extra payment and put in the NOTE space "Principal payment" or you can call them and tell them that your sending in an extra payment check. When you are shopping for a mortgage, make sure that there is no pre-payment penalty for extra payments and if ever you refi the mortgage.
The risk of having the HELOC is that it is variable and tied to some index. The most common is the bank prime rate, which right now stands at 5.5%.
http://www.federalreserve.gov/releases/h15/current/h15.pdf
This can change any time as did the past year (from June last year to now, the prime has increased by 1%). So there is more risk involve with the HELOC than the fixed/ARM-type mortgage. Additionally, most HELOCs charge you an annual maintenance fee.
What is good for you depends on your situation. If you owe a lot on your house, let say 300k, would you want the risk of having your interest shot up next month to 5.75% or 7% next year. Of course, we do not know what will happen in the future. Prime might go down, then you will save more. Just be aware of the risks involved.
Oh BTW, one good HELOC deal here:
Penfed: Prime - 0.5%
https://www.penfed.org/rates/mortgagerates.asp
Hope this helps. |
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| zerolikedis |
| Posted: Wed Jun 22, 2005 7:46 am Post subject: |
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Investing Manager
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| can you get a tax deductable line of credit without a mortgage?? |
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| Bankman |
| Posted: Wed Jun 22, 2005 11:36 am Post subject: |
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Investing Associate
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| zerolikedis wrote: | | can you get a tax deductable line of credit without a mortgage?? |
A mortgage and a home equity line of credit are two different animals. Mortgages are used to finance the buying of a home. Home equity lines of credit are lines of credit that is drawn on how much equity is in your existing home that can be used for anything you like. If you use it for home improvement, the interest is tax deductible. |
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