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There are many advantages of securing a home equity line against your home's value.  Whether you need to consolidate debt or simply enjoy the reassurance behind having an emergency line of credit it's important to understand how home equity lines can benefit you.  Some of the most popular ways consumers use home equity lines are:

Consolidate credit card debt
Probably the reason why most consumers take a home equity loan along with a possible tax deduction and easier approval criteria than unsecured personal loans.

Home Improvement
Use the existing equity in your home to make improvements such as another floor, an additional bedroom or even a garage.

Emergency Line of Credit
Once a home equity line of credit has been established many lenders will allow you to draw on this line for an extended period of time (usually 10 years minimum) without the consumer having to qualify again.

Avoid Private Mortgage Insurance (PMI)
If you are putting less than 20% down on a new home many lenders will require PMI (private mortgage insurance) however combining a traditional first mortgage with a home equity line may alleviate the need for this insurance.




If you put less than 20 percent down when buying a new home, lenders often require you to have private mortgage insurance (PMI). Private Mortgage insurance helps protect lenders and mortgage investors from severe financial losses in case the loan is not repaid. Although the benefits may not be seen on the surface these insurance premiums allow many lenders to offer loan programs with very minimal down payment requirements.  Without private mortgage insurance buying a home would become much harder since the bank would have to compensate for the risk in another way.  There are many ways you can avoid paying private mortgage insurance and still maintain low monthly mortgage payments. From a one time buyout to using a combination first and second mortgage at closing there are many attractive ways for you to finance your new home.

Learn more about PMI and the ways to avoid it ...

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