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Home equity loans are simple yet are sometimes treated as complicated. It’s a type of loan that allows a person to borrow against the value of their home, and to take advantage of equity they’ve built up.

Most industry experts express that homeowners should take more advantage of home equity loans, believing it to be a viable treatment of their best asset.

Here’s some basics that are important for everyone to know.

Low Rates, Relatively Easy Approval and Potential Tax Benefits

Typically, with home equity loans you can receive a fair interest rate, especially when compared to other loans. While not guaranteed, most homeowners can get approved even if they have bad credit, because your home is strong collateral.

As well, interest on a home equity loan can potentially be tax deductible, but not in every case. This is one question you will want to ask your accountant.

Large Amounts for Borrowers and Secured Loans for Lenders

Home equity can help you access a large sum of money if you need to overcome financial difficulties. It can also help you pursue a business opportunity or to fund an education or deal with a medical emergency. These things cost money, sometimes more than you have liquid in savings.

These loans are secured loans because banks feel comfortable extending you a loan based on the equity in your home.

You can borrow with a Home Equity Loan in Two Ways

Borrowers have two options when they are approved for a home equity loan. They can receive a lump sum or it can be dispensed as a line of credit. With a line of credit the money will be made available and you only repay what you use.

The way you borrow effects the repayment plan and accrued interest.

Be Wise in how you Borrow when your Home is Involved

As with anything, there are some pitfalls with home equity loans. Since your home is involved you don’t want to borrow against it to travel or repay a credit card. It is best used in specific situations and can be incredibly beneficial in those circumstances.

Home equity loans are incredibly valuable to those who qualify. It’s a secure and oftentimes flexible way to borrow against the investment of your home. Since your home is being used as collateral, you don’t want to take this loan lightly and it’s best to enter the arrangement with a strategy in hand.

What does a home equity loan strategy look like?

Understand how the Money will be Spent

The reason you are applying for a home equity loan is important, and subsequently, so is how the money will be used post approval.

Whether it’s to pay for medical expenses, exotic travel or even to pay off credit card debt, give thought to how the money will be spent. Consider if there’s a chance to experience any kind of return from this loan like the kind you could enjoy from investing in markets or opening a business.

What does the Repayment Plan look like?

No one likes repaying a loan but when you are discussing a home equity loan with the lender, try coming to the table with an idea of how you want to repay. This can sometimes be negotiable so be candid about your desirable terms and see if they are doable.

What is your Overall Goal?

Whatever your goal might be, build your strategy out from something achievable. If you are applying for a home equity loan to renovate your home then understand the cost of renovations, how long they will take and what the return will be. From there, you can determine how much you need and if you should apply for a loan or a line of credit.

Devising a strategy before taking out a home equity loan can help relieve some of the mystery and stress. It’s a way to retain control and know that you have stepped into the situation fully prepared for whatever can happen.

Even if you deviate from the plan, you’re still better off taking the time to learn and strategize.

Selling your home is a big decision. It also means moving, which can take a serious toll on your finances and be a real hassle. It’s not something that most people take lightly and there’s other factors at play. What effect will it have on your kids? Will you be able to profit from the experience? Will a new home meet your needs? And most importantly, does the need outweigh the cost and stress?

When asking yourself if it’s time to sell your home, you will want to consider the following.

Is it a Seller’s Market?

Have you noticed a lot of your neighbours are selling? Does it feel like a lot of homes in your neighbourhood or building are going for above asking?

One of the best reasons to sell is to turn a profit. This will allow you to upgrade your home and lifestyle. In most cases, one’s home is their greatest investment.

Does your Current Home Not Fit your Needs?

While it might not check off every box, your house or condo should enhance and not detract from your life. If your space feels cramped it might be time to consider selling and upgrading. This isn’t to say you should upgrade just so you can fit a second car but if you need a bigger garage and an extra bedroom then your current home just might not fit your life.

Your Finances have Changed

Life changes and it changes fast. If you lose your job or want to take a chance on a new business venture, then selling your home might make sense. You never want to take a loss but downgrading is a proven way to balance your finances if challenges arise.

On the flipside, if you come into some money or a fortuitous promotion then it might be a good idea to sell and upgrade into something closer than your dream home.

The best advice is to give thought to moving if you find yourself with multiple reasons, such as, improved finances and the value of your home has increased. That’s a good benchmark to accept that it is time to sell.

You’re a homeowner. It’s your name on the title and your one goal is to maximize the profit on the sale of your home. Here’s what whoever is representing your home must do:

• Price your house accurately
• Qualify buyers
• Advertise the listing
• Understand mortgages, regulations and contractual law
• Coordinate all the details of a closing

With this established, let’s look at the pros and cons of selling your home without an agent.

Pro: You Save on Several Fees which can Equate to Thousands of Dollars

Unless you have something against real estate agents, the main reason to avoid working with one is to save money. Since it’s not a small amount of money, it’s understandable if this is attractive. There’s always a risk of losing money in other areas due to inexperience but you will save substantially on agent fees.

Con: To do it Right you must Treat it as a Full-time job

Selling a home involves a lot of work. From research to staging to open houses to negotiating the deal, selling a home isn’t as simple as putting a “for sale” sign on your lawn. You should enter the process knowing that it is more than a hobby and requires daily commitment.

Pro: Complete Control

This one is no surprise. Some people want the control and are comfortable being responsible for every aspect of a sale. You will position every piece of furniture in your home, you will write every word of a listing and you will negotiate every term of the contract.

If this appeals to you, then you might fare well without an agent.

Con: You are Assuming Legal and Financial Risks

This is a big one. There are tons of legal and financial risks associated with real estate. One wrong step could cost thousands or have severe legal ramifications. It’s vital to weigh out the cost savings vs. the financial risk involved along with the potential cost of common legal issues.

Selling your own home is risky but that’s not to say that you can’t or shouldn’t do it. It comes down to comfort, personality and situation. Just know that if you go this route, it will take up a ton of time, could cost more in the end and there’s the potential for fall out.