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5 Things about Home Equity Loans You Must Know

5 Things about Home Equity Loans You Must Know

Home equity loans are unique in the sense that they can help you get excess cash against the value of your home without actually giving your home to anyone else. This option is particularly good for people with bad credit history, low-income level, or if they are of higher age.

Home equity loans have both their positive and negative aspects, but despite this, a lot of people exercise this option. If you want to avail home equity loan in the future or just curious to know more, here are some really great information bits for you:

1. They are good for tax purposes

Home Equity Loans exploded in popularity during the 1990s when there were certain deductions on consumer purchases.

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Interest paid on the home equity loans are tax deductible, therefore, many tax savvy individuals tend to take the second mortgage to save tax on the interest paid on such loans.

2. Interest rate is lower than charge by credit cards

The normal interest rate charged on home equity loans is higher than your first mortgage but it is a lot lower than what you may be paying on a credit card.

You can easily calculate how much it would cost you by using online calculators for home equity loans. Using online calculators can help to do comparison shopping before deciding on which home equity loan provider to choose.

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There are also reviews available online that can help you to make an informed decision on whether to go for a home equity loan or not.

3. They can be great for bad days

It is a fact that we all face financial troubles. Periods of financial insecurity often happen due to bad economic situations, job loss, or other events in our lives.

In bad days, normally people sell out their homes if they fail to pay their mortgage payments. You can easily find local, as well as national buyers of property on cash, who will be ready to buy them at a fair price. For many, it could be a good option to sell the property outright if they have alternative plans, but for many selling their home under difficult conditions may not be the option.

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Home equity loans are best for such people who are in distress and do not want to sell their properties to pay for their genuine needs. Instead of selling a home, it is always a preferred choice to take a second mortgage loan on the same property by leveraging the increase in the value of your home.

4. Home equity loans are good funding sources to pay off legal liabilities

Accidents happen every day, and so do medical emergencies. Instead of engaging a lawyer to fight long cases, you can easily use the proceeds obtained from home equity loans to pay off your lawyers’ fees, and any other legal liability arising due to undesirable events.

Since home equity loans are mostly obtained by people at the later stage of their lives, and it is normally paid off when the borrower dies, therefore, most of the times such loans are used to pay for medical and other emergency expenses.

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In the UK, there was also a trend where parents took home equity loans to help their kids to pay for down payment on their own first home.

5. Fixed vs Line

Home equity loans can be availed either as the fixed loans or as credit lines. Fixed loans are paid in each amount in one go and you cannot redraw it. However, in the case of a credit line, you get a sort of overdraft limit where you can draw and redraw the amounts when you desire.

Credit lines are especially good if you are willing to use home equity loans for paying the college expenses of your children, or even for your recurring medical expenses.

Featured photo credit: Guarantee Bank via gbankmo.com

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Adnan Manzoor

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Last Updated on June 25, 2019

5 Books You Must Read if You Want to Be a Millionaire in Your 20’s

5 Books You Must Read if You Want to Be a Millionaire in Your 20’s

Millionaires and billionaires read more than you think. In fact, the likes of Warren Buffet are said to read 1.000 pages a day. As the old saying goes “There’s no smoke without fire”; so, start off with these 5 incredible books!

1. The 48 Laws of Power

48-laws-of-power

    “If you are unsure of a course of action, do not attempt it. Your doubts and hesitations will infect your execution. Timidity is dangerous: Better to enter with boldness. Any mistakes you commit through audacity are easily corrected with more audacity. Everyone admires the bold; no one honors the timid.”

    On your journey to becoming a millionaire in your 20’s, there will be many people trying to manipulate you into doing what they want. This international bestseller by Robert Greene is the widely read by those in the entertainment industry because of its dog-eat-dog environment. This book is a must-read for anybody who wants to claim power and keep it. it’s a fun read that tells the story of some of the most powerful people in history.

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    An example of a law of power is: Always say less than necessary.

    • When trying to impress, the more you say the more common you look and less in control.
    • Be vague.
    • Powerful people impress and intimidate by saying less.

    2. Influence: The Psychology of Persuasion

    influence-the-psychology-of-persuasion

      “Often we don’t realize that our attitude toward something has been influenced by the number of times we have been exposed to it in the past.”

      This book explains the core strategies people use to influence others using real world examples. Robert Cialdini’s book goes over human quirks like the need to be consistent, and how you can use that in your marketing strategy to make more money. “People’s ability to understand the factors that affect their behaviour is surprisingly poor,” Cialdini says, “which leads to people making poor decisions without realising why.”

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      Cialdini includes real world examples of why people join cults, buy certain jewellery, or give to charity.

      3. Blue Ocean Strategy

      blue-ocean-strategy

        “Value innovation is the cornerstone of blue ocean strategy. We call it value innovation because instead of focusing on beating the competition, you focus on making the competition irrelevant by creating a leap in value for buyers and your company, thereby opening up new and uncontested market space. Value innovation places equal emphasis on value.”

        This book argues that leading companies don’t succeed by battling competitors in “Red Oceans”, but by creating “Blue Oceans” where they have uncontested market space to grow. It goes over case studies like “Cirque Du Soleil” who created a blue ocean by creating a circus platform that didn’t include animals or more than one act on at once but instead, decided to focus on talented performers and music who created a mystical storyline.

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        4. The Fountainhead

        the-fountainhead

          “A man’s spirit is himself. That entity which is his consciousness. To think, to feel, to judge, to act are functions of the ego.”

          The Fountainhead takes place in the United States, mostly in New York City, during the 1920s and 1930s. Billionaire Mark Cuban named his yacht “Fountainhead” after this book. This classic novel is about the struggles of an innovative architect named Howard Roark and his effort to achieve success on his own terms. Many entrepreneurs are inspired by this book because it depicts how you should be uncompromising when it comes to your vision and your goals. If you follow this way of life, you develop the ability to change the world and creating something unique.

          5. The Compound Effect

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          the-compound-effect

            “Do you know how the casinos make so much money in Vegas? Because they track every table, every winner, every hour. Why do Olympic trainers get paid top dollar? Because they track every workout, every calorie, and every micronutrient for their athletes. All winners are trackers.”

            This book is by Darren Hardy the CEO of Success Magazine, he goes over how it’s the small, seemingly insignificant choices that compound to create success or failure over time. No one has a plan to be broke and fat but that’s what happens when you don’t have a plan and go along the path of least resistance. Hardy argues that you cannot improve something until you measure it and to always take 100 percent responsibility for everything that happens to you.

            So, those are five books you must read if you want to give it a try to become a millionaire in your 20’s. What are the best books you have ever read? Leave a comment and share these life-changing books with your friends to help them become successful like you.

            Featured photo credit: Bill Gates Foundation via businessinsider.com

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