Executive Chronicles| Turn the Lemons into Lemonade with Home Equity Line of Credit |The present world economic scenario is not promising. People are losing their jobs left and right. So, in a period like this, people are in desperate need of a ready flow of cash. They need money to finance their family and maintain their lives in a normal way. Some might think of starting a business and support their livelihood. But starting a business is not an easy thing to do. So many of us have wonderful business ideas but we do not have enough capital to start an actual business. If you just talk about ideas for long, time will pass by and someone else will use your idea and make their business a successful one.
If there is a demand in the market for a particular product, some upcoming enterprise is already thinking of an idea to fetch that to the people. So, you need to decide whether you are going to start a business or you are going to see yet another big corporation steal your idea and inaugurate another outlet in your neighbourhood. If you want to change your life you need to take charge of your own life. So, if you need capital you can always go for the home equity line of credit and start your dream project.
What is home equity?
Banks provide a loan for various purposes. You might need an emergency loan for your health or for the health-related emergency of your family members. In this situation, you need a lot of money at your disposal. One might not be ready with such cash, so one might take a home loan from the bank. Now the bank will provide you with the money but you would need to put your home as collateral. This gives you independence over the money. You can use the huge sum of money and do the needful. If you want to start a business and the only thing that is holding you back is money, then you can very well take this opportunity to put your biggest liability, your home to the market. You can always rent a house for yourself as long as the business takes off. Once you hit the good money then you can return the loaned money with interests and reclaim the home that belonged to you. Or better yet you can buy a new house altogether.
Who is eligible for a home equity line of credit?
If you don’t have a mortgage on your house and you own the property yourself, you can put your house in the market. If you have a clean credit record, you are more eligible to get a home equity line of credit. You must remember that you are not selling the house when you are taking loans from the bank against your house. You are just taking a loan using your home as collateral. There is a structure in place, you have to abide by the protocol and return the money to the bank with taxes. If you fail to give back your money promised to the bank, they have the full right to claim the property and will force you to vacate the place.
So, before going through all these troubles you need to ask yourself, is it worth it? do you have a concrete business plan or do you need to do more research? Whatever you do you need to move forward with caution. Stay motivated, stay informed.