Equity Lines of credit are not always the best
Since this blog is not only about war and politics, which by the way gets boring after a while. I have decided to discuss something else.
In this case finance and loans. I have been hit hard by the Florida homeowners insurance increases and temporary peak in the real estate market. So I have to find additional ways to cut my expenses and so here is one way that I have found.
Now that the prime rate is over 8.5 percent, You may be better off finding a loan that has a lower interest rate and it may ofset your tax savings. So here is a prime example:
Last year my wife got a personal loan from a small savings bank that has a fixed rate of 5.5 percent and allows us to pat just interest only for 2 years. This loan is for $20,000 and the payment is about $85. At the same time I have a home equity line of credit for $50,000 and the interest only payment is $350. So I find that the first loan I could increase it to $50 and the payment would be about $210 for 50K. So then if I can save $140 a month, who cares of the tax savings of less than $50 a month that you get on your income tax return. $210 is still better then $350 - 50 ($300)
This is only possible to do if you have a good credit score, but it is going to help me to save $90 each month.
