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nrthshgrl
It goes fast. Pay attention.
Member since 7/05 57538 total posts
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PMI/Home Equity Loan?
Ok I'm not sure what I'm doing so I'll ask the pros for advice.
We just got rid of PMI. House appraised over $100K than what we paid for it. DH is looking to get the bathroom redone, new driveway and fence put in, etc.. Right now we pay about $150/mo more than our mortgage payment. Driveway & grading is becoming important since we had water in our basement last year (didn't we all?).
How would you go about getting the money to get the work done? If home equity loan interest is deductible, isn't that better than putting it on a credit card? We have very little (if any) credit card debt. It's frustrating having every thing done piecemeal.
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Posted 4/10/06 4:26 PM  |
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CookiePuss
Cake from Outer Space!
Member since 5/05 14021 total posts
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Re: PMI/Home Equity Loan?
Home equity loans/line of credit interest is only a deduction up to 100k in borrowed money. And being that isn't a deduction, it's really only your marginal tax rate you are getting the deduction on. In addition, if you are subject to AMT, this is not a preferenced AMT item and you will not be allowed the deduction. I hope this helps in your decison a little bit.
Message edited 4/10/2006 4:29:24 PM.
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| Posted 4/10/06 4:29 PM |
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DjPiLL
Member since 5/05 3664 total posts
Name:
Richard
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Re: PMI/Home Equity Loan?
Posted by nrthshgrl
How would you go about getting the money to get the work done? If home equity loan interest is deductible, isn't that better than putting it on a credit card? We have very little (if any) credit card debt. It's frustrating having every thing done piecemeal.
It depends on how quickly you plan on paying it off. HELOC interest rates are VERY HIGH right now. Even though HELOCs are deductable... that may not be the best move to make.
If you plan on paying off within a year... the better option is to find a 0% credit card deal.
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| Posted 4/10/06 4:29 PM |
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Re: PMI/Home Equity Loan?
I have a lot of anxiety about running up credit cards, so I'd probably do the HE loan since there are tax advantages with that and none with a credit card.
We're going through the same thing; there is so much we need/want to do but the $$ is not there. We already have a HELOC that we used to buy the house so we're just stashing cash for now (which we can do since we have no kids yet).
Hope this helps! Good luck!
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| Posted 4/10/06 4:29 PM |
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DjPiLL
Member since 5/05 3664 total posts
Name:
Richard
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Re: PMI/Home Equity Loan?
Posted by MrsProfessor
I have a lot of anxiety about running up credit cards!
I can understand this... but you have to remember that debt is debt in the end.
In this situation.... as an established homeowner... there really isn't any difference between CC debt and HELOC debt.
Even though HELOC debt is deductable... remember the deduction isn't as great as people think.
If you owe 10k. The monthly finance charge on an 8% HELOC is $66 buks. Yes thats deductable... so if you are in a 15% bracket... you will get back about $10 buks. So in the end you are paying $56 in interest that month.
Then take a CC deal. I have heard you can find CCs that have 3.9% interest for the life of the card. Even though its not deductable... you are only paying a monthly finance charge of $32.50. Its over $20 less than the HELOC.
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| Posted 4/10/06 4:38 PM |
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dandr10199
Grace is growing up too fast!
Member since 10/05 11561 total posts
Name:
Dina
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Re: PMI/Home Equity Loan?
Posted by DjPiLL
Posted by nrthshgrl
How would you go about getting the money to get the work done? If home equity loan interest is deductible, isn't that better than putting it on a credit card? We have very little (if any) credit card debt. It's frustrating having every thing done piecemeal.
It depends on how quickly you plan on paying it off. HELOC interest rates are VERY HIGH right now. Even though HELOCs are deductable... that may not be the best move to make.
If you plan on paying off within a year... the better option is to find a 0% credit card deal.
I agree.
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| Posted 4/10/06 6:10 PM |
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nrthshgrl
It goes fast. Pay attention.
Member since 7/05 57538 total posts
Name:
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Re: PMI/Home Equity Loan?
Thank you! I guess it wasn't as cut & dry as I thought.
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| Posted 4/10/06 10:29 PM |
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BrunetteMom
LIF Adult
Member since 8/05 1480 total posts
Name:
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Re: PMI/Home Equity Loan?
Posted by DjPiLL
Posted by MrsProfessor
I have a lot of anxiety about running up credit cards!
I can understand this... but you have to remember that debt is debt in the end.
This is so TRUE!
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| Posted 4/11/06 8:31 AM |
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Blu-ize
Plan B is Now Plan A
Member since 7/05 32475 total posts
Name:
Susan
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Re: PMI/Home Equity Loan?
I agree....we are doing some work now and I am applying for 0% cards. I would rather pay it off in 12 months interest free than take out an equity loan.
Plan on using about $15000.
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| Posted 4/11/06 10:46 AM |
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charon54
My two boys!
Member since 5/05 7279 total posts
Name:
Rebecca
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Re: PMI/Home Equity Loan?
You have FM
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| Posted 4/11/06 11:21 AM |
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