Your home is probably the largest personal asset you have and as an asset it can be used to increase your financial stability.
As your mortgage amortizes, it becomes a mandatory savings account with the balance of your mortgage decreasing with every payment. You begin to build equity. You can use this equity to improve your financial situation on other loans.
Now you may realize that you can deduct mortgage interest paid on your taxes but did you know you can also deduct up to $100k of home equity debt?
Based on the amount of equity you have in your home, you can borrow money against your home at a lower rate than credit cards and then use the money to pay off outstanding debt at higher rates. So you double your tax deduction by being able to deduct mortgage interest as well as home equity loan interest.
Boom! Now all of a sudden replacing your existing debt with a lower rate loan that is deductible makes a lot of sense. Help yourself into a debt free environment. Seek the advice of a trusted mortgage professional to assist you in analyzing your situation and talk over the benefits to a cash-out first mortgage or a dedicated home equity loan.
Another option can be selling your current home and paying off debt with the equity received at closing. The market is hot right now and Fairfax homes for sale are selling like hotcakes. Take advantage while the rates are still low.
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