news.epix.net wrote:
- quote -

Others would argue not to borrow against your home via a Home Equity loan
since you're putting your house at risk if you default. If you're doing it
to reduce credit card debt (I am not casting aspersions to anyone in
particular here....), as often that type of debt in incurred by folks that
can't manage credit cards well -- ergo, in six months, you might find
yourself in the hole with MORE credit card debt you've since incurred as
well as having to repay your home equity loan. Just the other side of the
coin.

Perhaps one might take out some other type of personal loan not backed by
the house, albeit the interest rate might (will be...) higher.
--
----------------------------- Regards -

- Andrew

efflandt[at]xnet.com (David Efflandt) wrote:

- quote -

There are two qualifiers to this:

1) If you don't have enough other deductions to exceed the standard deduction,
you get no tax benefit.
2) If you are subject to AMT, you can't deduct this unless you use it for
building, buying, or improving the house. (I think).

-- Doug

tufflaw[at]gmail.com wrote:

- quote -

If you intent is to get out of debt and stay that way, a home equity
loan is a viable alternative. If your intent just to lower your
credit card rates and continue in debt - don't take the loan.

D.
--
Touch-twice life. Eat. Drink. Laugh.

-Resolved: To be more temperate in my postings.
Oct 5th, 2004 JDL

On 27 Sep 2005 09:10:12 GMT, tufflaw[at]gmail.com <tufflaw[at]gmail.com> wrote:
- quote -

If you get a HELOC at (prime - 0.5%) and current prime rate is 6.75% the
HELOC would be 6.25% (until next FED increase). If you are in a 25%
marginal tax bracket, the 25% tax deduction results in 4.69% effective
rate.

So the combined balance transfer fee and interest rate would need to total
less than that. Since balance transfer fee is paid up front, 0% interest
for 6 months w/3% balance transfer is effectively more than 6% APR. So
even juggling 0% offers may not pay.

Personally I used a 2.99% check for "unlimited" time with $50 balance
transfer fee limit for my remaining balance. But I better not be late
because normal rate on that card has bumped up to 20.49%

If all you can find now for unlimited time is 3.99% and paid it off over 2
years, and it has a 3% balance transfer fee, that would push it to an
effective rate of over 5.49% (similar to 7.32% HELOC rate in 25% tax
bracket). If you paid that off sooner, or the best teaser check is
now 4.99%, effective credit card rate is even higher.

tufflaw[at]gmail.com wrote:
- quote -

Be careful with this. If you get behind on a credit card, it dings
your credit. If you get behind on a HELOC, you have put your house up
as the collateral.

tufflaw[at]gmail.com wrote:
- quote -

I definitly think a heloc is the way to go not only is the interest tax
deductable, but there is no way you are going to find a credit card
that can match heloc rates (given you have good credit and a combined
loan to value of 80% or less, the less the better your rate) you could
get a heloc for about 6% maybe even better, not to mention its never
good to pay off your credit cards with other credit cards, consolidate
through a heloc (make sure your loan amount factors in closing costs,
i.e appraisal, title, escrow anywhere form $2000 to $4000, or look into
some stream line doc options through your existing lender, you have an
fha first there are some quick and easy options

Thanks for the quick reply - do you know of any way to calculate the
potential savings of using each method?

Interestingly, I just got a letter from Amex offering me a home equity
line of credit.

It depends on the interest rate of the card. You can write off the home
equityl line interest but not the credit card interest so usually the HELOC
is the way to go.
Good luck,
Robert
www.jumbomortgages101.com
<tufflaw[at]gmail.com> wrote in message
news:1127750658.844095.297680[at]g14g2000cwa.googlegroups.com...
- quote -

Hello, I'm trying to get some advice. I am looking into taking out a
$15,000 home equity loan to lower my interest on a current debt.
However, I believe I can get a much lower rate via some of my credit
cards (currently do not carry any balances). Would it be wiser to
simply charge the $15,000 rather than take the loan in order to save on
the interest? Or is the interest on credit card debt calculated
differently such that it would end up costing me more over the long
run? Thanks for any advice!