The Debt Hawk » Home Mortgages

Time To Pay Down Home Equity Line of Credit

Hawk — Wed, 21 Apr 2010 10:22:07 +0000

The prime interest rate all year has hovered around 3.25% which is historically very low. But, it might be time to think about paying down your home equity line of credit or other home equity loan.

Prime Rate Historical Chart

Pay Down Primary Mortgage

Many people have been focused on paying down their primary mortgage instead of their secondary home equity line of credit. For years, their first mortgage has been at a higher interest rate than their second home loan.

For most people, they always pay off their highest loan first. So, they keep plugging away at their primary mortgage.

However, times may be a changing...You might want to switch to paying down your home equity loan, instead of your primary home mortgage.

Prime Interest Rate

Unlike your fixed rate home mortgage, many, if not most, home equity loans and home equity lines of credit are pegged to the prime interest rate. For the last 12 months, the prime interest rate has been very low making the total interest rate on your home equity loan lower than your primary home loan.

However, if the economy starts to improve and given the amount of spending our government has done over the last year, the Federal Reserve is going to start to get scared about inflation. This will cause the Fed to raise interest rates and the prime interest rate will be the first affected.

This very well could cause the interest rate on your home equity line of credit to go higher than your fixed rate home loan.

If this happens you will want to start paying down your secondary loan, instead of your primary home loan. It is hard to predict these things, but don't just put your finances on autopilot and assume your are still paying down the right loan.

2009 First Time Home Buyer Tax Credit Expires Soon

Hawk — Sat, 12 Sep 2009 15:01:55 +0000

The 2009 First Time Home Buy Tax Credit has fueled the housing market all year. New home buyers have been entering the housing market to take advantage of the home tax credit. But, if you have not purchased a house yet, you are running out of time.

The First Time Home Buy Tax Credit ends after November 30, 2009. That means that home buyers need to be in the closing process very quickly. If you are not under contract on your house soon, you will run out of time.

The United States Government has talked about extending the home tax credit, but you can't assume that this will be passed by Congress. Congress has a lot of items that they are dealing with, and it is not a certainty that the First Time Home Buy Tax Credit will be extended.

So, if you still are planning to buy a house this year and take advantage of the tax credit, make sure that you soon pull the trigger. I don't want you to miss out on taking advantage of the First Time Home Buy Tax Credit.

How To Pay Off Mortgage Early – Great Tips

Hawk — Wed, 08 Jul 2009 22:45:49 +0000

Sometimes it is hard to imagine actually having your home mortgage completely paid off But believe it or not, there are millions of Americans who actually have no mortgage. Would you like to learn how to pay off mortgage early?

If you do, I encourage you to check out a great article at the Suburban Dollar - Pay Your Mortgage Off Early. In this article, Kyle gives some great tips for paying off your mortgage early.

In this article talk about several ways to pay off mortgage early - (1) biweekly payments, (2) larger payments, (3) using raises and (4) gifts. My favorite of these is the simple larger payments option.

Another great thing about Kyle's article is that all of these methods can be applied to any of your debts. So, go over to the article above and take action today to reduce debt today.