STARTING A BUSINESS? CONSIDER CASHING IN ON YOUR HOME EQUITY

Depending upon which report you review, somewhere around 10 to 15 percent of Americans own their own business while a majority of those polled indicate they�d like to start their own business but for any variety of reasons they instead stay put, seeking the stability of a regular paycheck. Yet for those entrepreneurs who do want to get out of the 8-5 routine, starting a business can be a very exciting prospect. But it does take time, planning and of course money.

Let�s say you�ve been an accountant at a company downtown but have long yearned to start your own firm. You put a business plan together, show the bank how you will make money and how and when you can pay back the loan. A common choice is a Small Business Administration, or SBA loan. Yet while such loans can be found at most any bank or lending institution, they take time to process and some find they�re difficult to qualify for. Yet perhaps the easiest, least expensive option isn�t a business loan at all�consider cashing in on your home equity.

A home equity loan comes in two primary types, a one-time lump sum payment using your home as collateral or a home equity line of credit, or HELOC, which is a revolving account to be used as needed, much like a credit card, yet interest rates for equity loans are much, much lower than a credit card. Further, if you�re refinancing your current mortgage in order to lower your rate, adjust your loan term or switching from a variable to a fixed rate loan, you can pull out cash during the transaction and get one of the lowest rates available for most any type of loan. Remember, just as with any mortgage or equity loan, you�ll need to be able to show how the loan will be repaid. If your plans include quitting your job and get paid from your new venture, mortgage lenders would rather you keep your current job and use existing income instead of potential income from the new business. If all this makes sense to you, it pays to consider an equity loan. Your loan officer can run the numbers for you.

For more information or questions about mortgage loans,
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