Home Equity Loans

There are periods in one’s life when home equity loans come in handy. Consider this situation:

• You have a house that’s worth $250,000.00;
• You built equity in that house worth $130,000.00 (this means you’ve paid $130,000.00 of the $250,000.00 original mortgage amount leaving you with a $120,000 outstanding balance);
• Somewhere along the line, your basement developed problems and has to be renovated because the heating and cooling systems are not working efficiently and some walls and columns have to be knocked down. Total cost is $25,000.00;
• At the same time, your son decides to go to med school and will be needing financial help outside of his scholarship funds. Estimates are that for nine years he will need at least $75,000.00;
• The combined total of the basement and your son’s education comes to $100,000.00

What are your options?

• You can sell your house and let the buyer repair the basement himself;
• Tell your son to give up his dreams of becoming a doctor and be a landscape artist instead;
• Sell your wife’s art collection which should fetch about $150,000.00. That should neatly cover your basement and your son’s aspirations, plus have leftover cash to possibly finance a trip;
• Request the credit card company to increase your limit to $125,000.00;
• Since your son is going away to university, rent his bedroom out;
• Borrow $100,000.00 from friends and family;
• Take a second job; your wife can do the same;
• Write a novel and hope it tops the bestsellers list;
• A friend suggested speaking to your bank about a home equity loan.

Which option seems to be the most attractive to you? Your heart would bleed if you sell the house (it’s a great asset and will serve you well when retirement comes around). Your son might resent you the rest of his life if you don’t help him become a doctor (besides in your old age, you could use a doctor in the house). Your wife has worked hard to build up her art collection and there’s the possibility that she’d rather divorce you than sell her most precious possession.

Requesting your credit card company to up your limit to $125,000.00 means you could be paying through your nose on interest charges alone. Renting your son’s bedroom out is a worthwhile option to consider, except he’s made it clear that he intends to come home during the holidays and may need to live with you after med school just to get his finances straight.

Taking a second job would only generate stress which in turn could elevate your blood pressure. Writing a novel? You never fancied yourself a writer because you always had a secretary who did your correspondence for you. Even your Valentine cards to your wife are written by your secretary…so it looks like that the…

Home Equity Loan is One of Your Best Options

Anyone who looks at your situation and knows about home equity loans will readily say the same thing. Home equity loans are one of the best bets around for a homeowner who has built equity in his house and needs some cash.

Millions of homeowners who experience a financial crunch at some point in their lives have asked their banks for home equity loans that will help them weather a monetary crisis. If you need money for major renovations, help your children with their education, pay for assisted living facilities for your aging parents, or just to consolidate various loans in your portfolio, home equity loans are the smart way to go.

Why don’t you speak to your lending officer today? You might be surprised at how much money you can borrow at very low rates. Home equity loans are popular because of their low rates. The reason the rates are low is the bank knows they can get to your house as collateral should you default.

Home equity products are packaged so that borrowers can avail of a privileged low rate without access restrictions to credit when needed. Plus the bank won’t dictate how you are to use your money. That’s entirely your decision. Some banks can lend you as much as 75%-80% of the appraised value of your house, and even up to 90% if you take out mortgage insurance against default.

Be careful: banking terminology can be confusing to first time borrowers. There is a difference between a home loan and a home equity loan. Don’t confuse your banker by telling him you need a home loan when in fact it is a home equity loan you need. A home loan is a loan you apply for to purchase a house. A home equity loan is a loan you borrow against the equity you’ve built in your house, assuming you have built equity. We don’t think it is possible to apply for a home equity loan right on the day you moved to your new house, because you haven’t paid enough into the mortgage. If you have a $100,000 house and you’ve already paid some $20,000.00, then it might be possible to ask your banker for a home equity loan if necessary (although we think this is still a fairly low amount). Since the amount you can borrow is calculated on the basis of the appraised value of your house, your banker might be willing to offer you a home equity loan even with only $20,000.00 equity.

It pays to shop around for home equity loans. You need not take one out with your original mortgage lender. If you can find one with flexible terms and conditions, then go for it. Read the fine print though. And please, don’t get carried away. People who come upon a large amount of money suddenly dream bigger. Instead of the basement renovation that they originally took out the home equity loan for, they throw in a cruise and a car. Your banker will definitely not object – the money is yours and you can do anything with it – but that money is still a debt. Make that DEBT!

Home Equity Loans not the Same as Home Equity Lines of Credit

It is also important to know the distinction between a home equity loan and a home equity line of credit (HELOC). A report said that about 7 million Americans applied for home equity loans in the past year. But the needs of those 7 million are not all the same. Your needs could be unique so think about the pros and cons before you sign those loan documents.

A home equity loan and a home equity line of credit are like second mortgages; the main difference being that in a home equity loan, you receive one lump sum. In a home equity line of credit you get a line of credit that you can tap whenever the needs occur. Another difference is that the interest rates may vary. For the first type, you may get a fixed interest rate but when you take into account fees and closing costs, the “low” interest rate you thought you were getting may not be that low after all. Home equity lines of credit are usually not subject to hefty fees or closing costs but your interest rate is variable, which means you have to go with the flow – otherwise known as the prime rate.

We reiterate: read the fine print. This is critical especially if you are applying for a home equity loan and the original mortgage isn’t paid in full yet. You’ll come across legalities such as subordination clauses that you should clarify with your lender.

The Debt Crisis

Before and after the recession in the U.S. and all over the world, everyone would have noticed two important changes. One was unemployment and the other was price rise. We should have observed that petroleum and its byproducts shot up like never before and this created a chain reaction to the prices of all other commodities mainly due to transportation.
Unemployment and layoffs again contributed to change in the style of functioning of Banks and establishments. Banks indeed still have not recovered fully and are reluctant to help people in debt. Even today many are laid off. People who have associated with more than 10 years of committed and dedicated work are now unemployed. This has led to debts and many of them are not able to find a new job hence diving deep into debt.
Some families have sold their mortgaged homes, cars and other assets just to get out of debt. It has turned into a crisis now. So, the debt crisis is here to stay and needs to be addressed in a proper way among people through "Debt Management". This subject has not been seriously taught in schools or collages and now, one has to learn this all by himself or take the help of a debt consultant, a financial advisor or a counselor.
When someone is in debt, or owes money to someone else it is becomes such a burden and is sometimes virtually painful. It also brings someone to a desperate situation, which leads to family break up, discontinuing education/school. It has even driven people to the extent of leaving the country from the fear of harassment by the creditors, bill collectors and the rules of the bank.
Throughout this article you may have observed the debt crisis that invariably affects hundreds of thousands of people all over the world. If yes, then what is the solution? If you are in a similar position what would you do to come out of the debt crisis?
There are indeed lot of ways to come out of debt, by taking action yourself and by gaining knowledge about Debt and its management. Lot of books and articles are available but in most cases it has to be dealt with some expert help.
Some of them go for debt consolidation, some of them go for debt relief, and some of them even go to the extent of declaring bankruptcy. They have not taken the decision hastily, but wisely. Even then for many who have overcome debt, it is a miserable experience. They have learnt a lesson and will ensure that they will never get into debt again. That's why this article is called, the debt crisis.

New Food Pyramid

There are now two food pyramids. The U.S. Department of Agriculture (USDA) changed the food pyramid in spring 2005 because they wanted to convey a better example of how to eat healthier. The pyramid is based on the best available scientific facts concerning links between diet and good health. This new food pyramid addresses flaws in the original USDA food pyramid and offers better up to date information allowing people to better follow guidelines concerning what they should eat.
Below is a picture of both the old and new food pyramids.
 

Understanding the food pyramid: You should center your diet around the foods at the base of the food pyramid, and eat less of the foods at the top. If you're watching your weight then you should concentrate on eating the minimum number of recommended daily servings. If you are looking to gain extra weight, eat the maximum number of servings.
You may also be interested in seeing how many calories you burn during certain activities How to Count and Calculate Calories
 
Picture of the old food pyramid

Old food pyramid picture

How much is one serving? Milk products group: 1 cup about 8 oz. of milk or yogurt 2 slices of cheese, 1/8" thick (1 1/2 oz.) 2 cups of cottage cheese 1 1/2 cups of ice milk, ice cream or frozen yogurt Meat group: 2 oz. to 3 oz. of cooked lean meat, poultry, fish 2 eggs 7 oz. tofu 1 cup cooked legumes or dried beans or peas 4 tablespoons peanut butter 1/2 cup nuts or seeds Vegetables: 1/2 cup cooked vegetables 1/2 cup raw chopped vegetables 1 cup raw leafy vegetables 1/2 to 3/4 cup vegetable juice Fruits: 1 whole medium fruit (about 1 cup) 1/4 cup dried fruit 1/2 cup canned fruit 1/2 to 3/4 cup fruit juice Bread and Cereals: 1 slice bread 1 medium muffin 1/2 hot dog bun or hamburger bun 1/2 bagel or english muffin 4 small crackers 1 tortilla 1 cup cold cereal 1/2 cup cooked cereal 1/2 cup rice 1/2 cup pasta

 

How many servings of each per day should you eat?
Foods	Women - Children - Elderly	Teenage girls - Active Females - Males	Teenage boys - Active Males
Calorie level	Aprox. 1,600	Aprox. 2,200	Aprox. 2,800
MILK Group Products	2 to 4	2 to 4	2 to 4
MEAT Group	2	2	3
VEGETABLE Group	3	4	5
FRUIT Group	2	3	4
BREAD and Cereals	6	9	11
Total Fat in grams	36 to 53	49 to 73	62 to 93

HOW DO I POSSIBLY EAT ALL THOSE FRUITS & VEGETABLES ? 

 

Picture of the new food pyramid

The New Food Pyramid is a tool to educate people to eat a more balanced diet from a greater variety of food portions without counting calories. The USDA has now expanded the four food groups to six groups and expanded the number of servings to meet the calorie needs of most people.

Healthy Balance Diet Plan

Overview

Eating healthy ensures weight loss that is sustainable and less likely to be regained. According to the American Heart Association, eating a healthy diet can add years to your life as well as enhance the overall quality.

Benefits

Help Guide suggests that eating a healthy and balanced diet means more than just losing weight. It helps to sustain energy and reduce risk of developing such diseases as diabetes, cancer and heart disease. It provides you with the daily nutrition needed to feel good. By eating a healthy diet, your mood can improve and your thoughts may become clearer.

Considerations

To implement a healthy diet plan, start off slowly and be patient with yourself. Moderation is always key, according to Help Guide. Serve smaller portions and begin to make changes slowly. Every change your make in your diet is significant. Take time to chew your food and eat with others. Cook at home. Begin to listen to your body and eat smaller meals throughout the day.

Basics

The American Heart Association recommends eating a variety of nutritious foods every day. Eat whole grains, legumes, fresh vegetables and fruits. Some whole grain choices include brown rice, millet, barley and quinoa. Dark leafy greens and root vegetables are mineral-rich. Eat lean proteins, such as broiled fish, nuts or beans. Fish like salmon, sardines or herring provides the body with much needed essential fatty acids. Take a whole food vitamin daily and drink plenty of water.

Foods to Avoid

Avoid sodas and processed foods, as well as saturated fats, which can be found in red meat and whole milk dairy products. Keep refined sugars in moderation. Help Guide says that sugars can make energy levels rise and fall and can cause depression. Limit sodium to 2,300 mg per day. Processed foods, restaurant and fast foods often contain too much sodium