on line home equity loan
Equity loan or reverse mortgage?
DEAR BOB: My stubborn mother, 78, owns her home free and clear, is alert and in quite good health. The house is worth about $450,000. When I recently visited her (I live about 1,500 miles away so don't get to see her often), I was shocked at how run down her house has become. The roof leaks. I could smell the mold. She finally admitted to me, after a glass or two of champagne at Sunday brunch, that she has outlived her assets, except for social security and a small pension. When I suggested a reverse mortgage, which you often recommend, she said her banker recommends a home equity loan to pay for a new roof and other repairs. She wants to stay in her house "forever," especially because she loves her garden. What do you suggest?
-- Thomas R.
DEAR THOMAS: The big drawback of a home equity credit line is it requires monthly payments of at least interest only.
More on line home equity loan info
Sacramento Residents Reducing Home-Equity Loan Use
(AP) SACRAMENTO Sacramento-area residents have reduced their use of home-equity loans at twice the rate of Californians as a whole in the early months of 2006, according to a new report. After area home-equity borrowing hit $7.6 billion in 2005, it fell by about 10 percent between January and April this year, according to DataQuick Information Systems, a La Jolla-based housing consultant. Statewide, borrowing fell by half that amount -- about 5.2 percent. The company examined property records in eight counties in the Sacramento area, with the most extreme borrowing decline taking place in Sutter County -- a drop of 41.7 percent from early 2005 to early 2006. Home values in the area are significantly lower than they were during the second half of 2005, and interest rates are up. Analysts say these factors could be to blame for the diminishing market for home-equity loans.