By Laura Saunders Laura Saunders The Wall Street Journal BiographyLaura Saunders @SaundersWSJ Google+ [email protected] June 15, 2018 5:30 a.m. ET 60 COMMENTS For years, Americans could borrow against their homes to pay for a new car, college tuition, or even a trip to the Caribbean, and then deduct the interest on those loans. No more. Last year’s tax overhaul prohibited interest deductions for home-equity loans and home-equity lines of credit, known as Helocs, unless the funds are used for certain types of home improvements. The change took effect for 2018 and will affect many people. As of March, there were 4.2 million home-equity loans with balances totaling $127 billion, and 9.3 million Helocs with loan balances totaling $419 billion, according to Equifax Inc. EFX -1.06% As a result of the changes, Scott Davis, a retired engineer in Prescott, Ariz., will no longer get a write-off for the interest on a $50,000 Heloc he took out in 2013 to help his … [Read more...] about Your Home-Equity Loan May Now Be a Lot More Expensive
Releasing equity on your home
Last Updated Mar 15, 2011 6:39 PM EDT Recent reports from the Center for Retirement Research at Boston College and the Society of Actuaries show that the majority of Americans approaching retirement have more wealth in their home's equity than in their 401k fund and other retirement savings. What I wonder is, when aging boomers start realizing their 401k balances aren't sufficient to fund their retirement, will they consider tapping their home equity as a source of retirement income? "No" might be the answer you'd conclude based on a recent news release from the Society of Actuaries. It issued a report that found that only 16 percent of current retirees have tapped home equity to finance their retirement, and only 20 percent of pre-retirees were considering this course of action. Of the few people who reported using their home equity to finance their retirement, the most preferred method of funding was to sell their home and use the proceeds to generate retirement income. Here are the … [Read more...] about Your Home Equity: How to Use It for Retirement Security
Last Updated Apr 30, 2009 4:07 PM EDT According to a new survey from secondary mortgage market lender Freddie Mac, half of all borrowers who refinanced in the first quarter of 2009 lowered their annual mortgage interest rate by 20 percent. On an individual basis, homeowners who took advantage of the lowest interest rates in 50 years (mortgage interest rates averaged about 5 percent in Q1 of this year) saved an average of $160 per month. In big numbers, these homeowners will save a total of $2.5 billion in mortgage payments in the first year after refinancing. As Frank Nothaft, Freddie Mac's chief economist, pointed out in a press release, if the interest rates stay at 5 percent, and the rate of refinancing holds up, homeowners will save about $10 billion collectively in the first year after refinancing. Amy Crews Cutts, Freddie Mac's deputy chief economist, noted in the same release that the number of cash-out refinancings, as well as the amount taken out, had dropped noticeably from … [Read more...] about How Much Did You Save on Your Refinance?
Embarking on a major home improvement can be exciting, but it's hardly without risks. Before you decide to put a chunk of your money (most likely borrowed) into your home, you need to think deeply about several things. Before deciding on the specific improvements to make, take a tour of homes like yours in your area, including a few listed for sale. Visit several new developments to see what features newly constructed homes are offering. If several homes in your immediate neighborhood suddenly came on the market at the same time as yours, would the improvement you're considering make your home stand out? Let's say your planned improvement appears to be worthwhile. Now you have to deal with contractors and estimates. If you plan on hiring a tradesman or contractor, you'll need to get bids or estimates from at least three qualified professionals. If there's strong demand for home improvement services in your area, this might be difficult to do, but don't skip this step. Check references, … [Read more...] about Before you take on that home improvement project…
Dear Graham We are in our 70s and both reasonably healthy and active. We are considering releasing some equity in our home to provide extra income but rates of interest on such schemes seem usuriously high to us and, while in one sense that's no problem as the debt would be capped at a certain level and only fall due after our deaths, a likely outcome if we live several years or have to go into a nursing home is that we'll have nothing to leave to our children, who are currently helping their own children with rents, and are strapped for cash. We would never have been able to buy our home without small timely legacies from elder family members, and it doesn't sit well with us to think we might... To continue reading this article Start your free trial of Premium Access all Premium articles Subscriber-only events Cancel any time Free for 30 days then only £2 per week Try Premium Access one Premium article per week Register for free … [Read more...] about Dear Graham Norton: ‘Should we release equity in our home if it means leaving nothing to our children?’