Estate Planning and Access to Equity in Your Home
Home Equity Lines of Credit allow you to get cash from the equity you have in your home. Most lenders look for a cushion of 30% equity already in the home before they will consider allowing the homeowner to borrow against the home’s equity. With house values declining, some homeowners can’t meet this 30% requirement. Other homeowners find they have little in excess of this 30% requirement available to borrow against.
The rates offered by lenders for Home Equity Lines of Credit are not as attractive as they used to be. Earlier, the rates were the prime rate (the interest rate banks offered to their best corporate customers) minus one percent. Today, the rates charged are often the prime rate plus two percent.
Home equity is a consideration for estate planning. It is a major asset and in many cases the largest assets in an estate. Careful consideration needs to be given before a decision is made which will affect home equity in the short term and the long term.
Contact a law firm that handles estate planning and real estate matters for further information.
