Begging Us to Get Into Debt
Question: We have been living in our house for about 4 years and we are adding : on. We are applying for a home improvemnt loan to cover the addition : and the people handling the loan are asking if we want to consolidate : any other debt into the home improvement loan. : : I understand that if the interest rate on the home improvement loan is : lower, this might be a good idea and it will certainly give us more : emergency money per month which we will apply to the new loan as needs : allow. : : What other kinds of things should we look at when making this decision?
Answer: When you refer to a home improvement loan I’m not sure if you’re talking about a home equity loan, which is secured by your equity in your home.
If so, it’s worth considering that the interest on such loans is tax-deductible, whereas it is not on other types of consumer debt. It’s also worth considering that should you find yourself unable to repay, in a worst-case scenario you could lose your home.
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Filed under: Home Equity Loan
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