I have always thought that a home equity line is the same as a home equity loan. I was wrong. There are similarities between these two, as well as differences.
A home equity line of credit is also called HELOC or a line. A Home equity loan is called HEL or a loan. They are both designed to enable the home owners to borrow against the value of their homes.
HELOC is like a personal credit card. You can borrow as much as you want at anytime, up to a predetermined credit limit. You are required to make monthly minimum payments. You have the flexibility to pay off your balance anytime you want. HEL is a loan. You get the lump sum up front, up to the limit that is predetermined. Afterwards, a fixed monthly payment is required until the balance is completely paid off.
Generally speaking, the HELOC and HEL have a much lower interest rate compared to your credit cards or other loans. It is also relatively safe since it is secured by your property. The interest you pay on those is also tax deductible.
HELOC usually doesn’t have any closing cost. Its interest rate usually starts out lower than HEL, but it fluctuates with the prime rate. It is also relatively riskier. However, it does give you the option to take money out whenever you need. Vice versa, HEL has a closing cost. It offers you fixed interest rate, as well as the adjustable rate.
It depends on your own situation and flexibility. HELOC and HEL should be considered depending on the individuals. If would you like to find more information on the subject, you can visit the following websites.
http://realestate.yahoo.com/loans/guides/your_equity_options.html;_ylt=Ai5JitHP29yMV4UajsiRltyavYl4
http://realestate.yahoo.com/Georgia/Marietta/loans;_ylt=Auq6sNrnw4NLi.r22EZboZqTvYl4
Saturday, February 23, 2008
Bad Economic Strategy
I was reading the news earlier today. The news actually stood out and surprised me—more and more people are tapping into their 401K plan to make their monthly payment.
While groceries and utility bills are getting more expensive, many borrowers are having a hard time to make their SUV, mortgage, and credit card payments. Even though the interest rate has been cut a few times last month, the banks are tightening up their standard for loan borrowers. Many credit card companies, such as American Express, have already reduced their consumers’ credit limit.
Many middle income class Americans have their credit cards maxed out. They have mortgages that are not affordable. They also drive large SUVs or luxury cars that they can only lease. The bad financial situation has pushed many Americans to the edge. People are withdrawing their retirement money from their 401K plan. They are borrowing loans every month from their retirement savings. A 401K plan allows the contributors to take out loans up to $50,000 or 50% of the total investment, whichever is less.
For many 401K contributors, this is a very bad plan. People who can repay their loan back in a fixed period might not suffer from the penalty. People who eventually claim default will be in big trouble. Even if you can pay back your loan, you will earn less on your contribution. Besides that, many plans would not allow you to contribute until you pay off your balance.
What a terrible idea to withdraw from personal retirement savings. We are lowering our future living standard because we are buying luxury goods we can’t afford. Borrowing money is like a rolling a snowball. The more you add to it, the bigger the snowball is, and the worse the problem becomes.
http://biz.yahoo.com/ap/080219/borrowing_against_retirement.html?.v=2&.pf=retirement
http://www.msnbc.msn.com/id/23241606/
While groceries and utility bills are getting more expensive, many borrowers are having a hard time to make their SUV, mortgage, and credit card payments. Even though the interest rate has been cut a few times last month, the banks are tightening up their standard for loan borrowers. Many credit card companies, such as American Express, have already reduced their consumers’ credit limit.
Many middle income class Americans have their credit cards maxed out. They have mortgages that are not affordable. They also drive large SUVs or luxury cars that they can only lease. The bad financial situation has pushed many Americans to the edge. People are withdrawing their retirement money from their 401K plan. They are borrowing loans every month from their retirement savings. A 401K plan allows the contributors to take out loans up to $50,000 or 50% of the total investment, whichever is less.
For many 401K contributors, this is a very bad plan. People who can repay their loan back in a fixed period might not suffer from the penalty. People who eventually claim default will be in big trouble. Even if you can pay back your loan, you will earn less on your contribution. Besides that, many plans would not allow you to contribute until you pay off your balance.
What a terrible idea to withdraw from personal retirement savings. We are lowering our future living standard because we are buying luxury goods we can’t afford. Borrowing money is like a rolling a snowball. The more you add to it, the bigger the snowball is, and the worse the problem becomes.
http://biz.yahoo.com/ap/080219/borrowing_against_retirement.html?.v=2&.pf=retirement
http://www.msnbc.msn.com/id/23241606/
Papa Johns Pizza – the Best Business Idea
Everybody loves Papa Johns Pizza. I know it’s my favorite. Compared to Pizza Hut and Dominos, Papa Johns not only has the best pizza with the best ingredients, but also the best business infrastructure.
The founder John Schmatter, started Papa Johns in 1984. Nobody ever thought that a pizza delivery idea would become the number one business in America. John Schmatter redefined the pizza industry’s success. His stores are all over the world. The majority of his stores only do carry-out and delivery. Even though some of them might have a couple of dinning tables inside, they were not designed to be dine-in restaurants. Those tables and chairs are designed for people who order pizzas and decide to wait inside.
Because no fancy restaurant decor is required, Papa Johns’ stores have a relatively low cost. The stores are also smaller than other pizza restaurants. Papa Johns focus on the quality of each pizza they put into the oven. They invest a tremendous amount of money into their TV and coupon advertising. They also update their website constantly. They have special heart shaped pizzas for Valentines’ day, and new whole wheat crust pizza for healthier nutrition. They are constantly improving their pizzas.
With their great advertising strategy and different promotion code for different occasions, Papa Johns is able to stay on top and become American’s best pizza brand. Low cost and high revenue gives Papa Johns its greatest profit.
http://www.papajohns.com/pj_story/index.htm
http://ir.papajohns.com/phoenix.zhtml?c=115556&p=irol-IRHome
The founder John Schmatter, started Papa Johns in 1984. Nobody ever thought that a pizza delivery idea would become the number one business in America. John Schmatter redefined the pizza industry’s success. His stores are all over the world. The majority of his stores only do carry-out and delivery. Even though some of them might have a couple of dinning tables inside, they were not designed to be dine-in restaurants. Those tables and chairs are designed for people who order pizzas and decide to wait inside.
Because no fancy restaurant decor is required, Papa Johns’ stores have a relatively low cost. The stores are also smaller than other pizza restaurants. Papa Johns focus on the quality of each pizza they put into the oven. They invest a tremendous amount of money into their TV and coupon advertising. They also update their website constantly. They have special heart shaped pizzas for Valentines’ day, and new whole wheat crust pizza for healthier nutrition. They are constantly improving their pizzas.
With their great advertising strategy and different promotion code for different occasions, Papa Johns is able to stay on top and become American’s best pizza brand. Low cost and high revenue gives Papa Johns its greatest profit.
http://www.papajohns.com/pj_story/index.htm
http://ir.papajohns.com/phoenix.zhtml?c=115556&p=irol-IRHome
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