Few Points to Discuss before You go For Home Equity

By Petra Amelia on October 15th, 2007

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Here are some points that should be discussed with a trusted financial advisor before you go for home’s equity: Will your investment deliver a greater after-tax return than you’ll be paying for the loan? Does your home equity loan or line carry an adjustable rate? If so, a jump in interest rates may make what you owe even more expensive and further offset any gains you make in your investment. If rates fall, it’s good news, but given current conditions, it makes sense to be cautious. How much is property appreciating each year in your neighborhood on average? Is it enough to further offset the cost of your investment? Keep in mind that no one is predicting the type of double-digit property appreciation we saw before 2004.

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