Using your home as a piggy bank – Tap the equity you’ve accumulated and get tax breaks

With the increase in the debt obligations in the nation, there is an increasingly large number of people who are desperately looking for ways to make ends meet. Due to the lack of people who can don a stellar credit rating, the chances of grabbing unsecured loans at high interest rates are gradually becoming fainter. But does that mean that it is impossible for all those debtors with a tarnished credit score to get a consolidation loan? Certainly not! If you’re someone who owns a home and has accumulated enough equity in your home, you needn’t worry as you can tap the equity in your home and take out a secured debt consolidation loan through which you can easily combine your debts into single monthly payment. Check out the concerns of this article to know more on home equity loans.

What are home equity loans or lines of credit?

If you’re not aware of the meaning of the word “equity”, you should know that it is the difference between the value of the property and the amount that you owe your home mortgage lender. Both home equity loans and home equity lines of credit allows you to borrow a lump sum amount against the equity that you’ve accumulated in your home to make some kind of discretionary purchases and even to repay debt. While incurring additional debt, you need not worry as you have the option of taking out a home equity loan.

Using a home equity loan to combine your unsecured credit card debts

Although home equity loans carry typically high interest rates than the first mortgage loans, they undoubtedly carry lower rates than the unsecured lines of credit. If you wish to combine your unsecured debts through a secured home equity loan, here are the benefits that you should consider.

  • The interest rates help you save money: When you’re already drowning in unsecured credit card debt, you must be looking for ways in which you can repay debt and also save your dollars. The home equity loan carries interest rates that are way lower than what you would have to pay on an unsecured loan and therefore this process of merging your debts will offer you a win-win situation.
  • The repayment term is long enough: As the home equity loan is a secured loan and involves a huge amount, the repayment term is usually longer. With a longer repayment term, the monthly payments become manageable as you can spread your payments throughout a longer period of time.
  • The tax breaks: Is a home equity loan tax deductible? Well, the answer is Yes. In fact the biggest benefit of merging your unsecured debts through a home equity loan is that you get tax breaks. The interest rate that you pay on the home equity loan are tax-deductible and hence you can get tax benefits through this option.

A deeper view into the tax-saving feature of a home equity loan

A nice feature about home equity loans mentioned above is that the homeowners can get a tax deduction for the interest rates that they pay on the mortgage. The taxpayers are supposed to claim a deduction on the interest rate paid on a loan that has been secured by their first or second home. Although most of the home equity loans fall into this same category, the borrowers might get confused when they have more than one “Second homes” in excess of the value of the home.

So, this goes without saying that the advantage of using a home equity loan is that you simply save your dollars. If you use your HEL for a debt consolidation program and your interest rates become tax-deductible, isn’t that a huge savings? If you’re going through such a situation, get in touch with your lender and get a home equity loan to avail the above mentioned benefits.

Fixing Your Tax Return After It’s Been Filed

As humans, we are all prone to mistakes. You never know what is going to come up to prevent you from filling something in properly or from missing out a document you needed to complete. There are so many different aspects that you can forget in a given day, everyone does it and it just part of who we are. However, sometimes these mistakes occur when you file your tax return. This often leads to larger problems with the government, but it can also mean you are missing out on financial income that you should be receiving. Because of this, if you notice there is an issue with your tax return and you want to correct it, you can file a new return after you have already file the previous return. In order to do this though you just need to know what to look for and what is going to work out for you. This way, it is going to work out in your advantage and you can receive the money you are properly owed.

When it comes to filing a tax return after you have already filed the original one you can either go about doing it yourself or you can pay a professional to do it for you. If you just don’t have the time or want to deal with it at all it is possible to pay someone else to file the documentation. You just need to bring in your paperwork and the adjusted information and the professionals are able to handle it for you. Just make sure to know how much it costs and what you’ll be receiving in return, because you don’t want to end up paying more money to the company than what you’d actually make in return from the altered tax filing.

If you want to perform the filing yourself you need to make sure and obtain not only the corrected information, but also the paperwork that signals an alteration and correction towards your original tax return. You can obtain this online through an easy download and you really just need to fill out the information, which should take no more than a few minutes. With everything corrected you just need to mail it out and, without a few weeks or so, you should receive the corrected information. It might take a little bit longer, depending on the time of year you send it, so just make sure to watch your mailbox.