When people are looking to buy or sell a property, using the equity they have built in their current residence can be a valuable way to gain advantages that otherwise would be difficult to have. When people in Pennsylvania work hard to manage their debt appropriately and use their money strategically, they can put themselves in an advantageous position for future real estate transactions.
The way a home equity loan works is it allows people to take a fixed amount of money, not exceeding 80 percent of their equity, to borrow at a fixed interest rate. Some of the benefits of having a home equity loan or second mortgage is that people may be able to acquire a better interest rate, as well as claim their interest as tax-deductible. Additionally, the amount of money they are allowed to borrow may be more than if they had a traditional loan.
What some people fail to understand is that their home functions as collateral in the repayment of their loan. Thus, making payments on time becomes even more critical because missed payments could cause a person’s home to go into foreclosure. If a person who has a home equity loan chooses to sell their property, they will be required to repay any outstanding balances.
If people are having issues with buying or selling their real estate or experiencing conflict over contractual agreements, they may wish to hire an attorney. Legal professionals may be able to find information to support their clients and help them protect their interests.
Source: The Sparta Independent, “Financial Expert Marion G. Cuff, CFS: Tapping the Equity in Your Home,” Nov. 25, 2018