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5 Times a Home Equity Loan Makes Sense

If you owe less on your home than it’s worth, you have equity. With a home equity loan, you borrow against that equity and pay the loan back in equal monthly installments for a preset number of years (typically, five to 30 years). The amount you can borrow is usually capped at 80% to 85% of available equity. For example, if your home is worth $300,000 and you owe $200,000, you have $100,000 in equity. That means you may be eligible to borrow $80,000 to $85,000 in a home equity loan.

When you take out a home equity loan, your home acts as collateral, meaning a lender can repossess your house if you fail to make payments. Home equity loans can be useful, but it is crucial to consider whether you can afford one before moving forward.

Also consider how you intend to use the home equity loan. Here are five times taking out a home equity loan makes sense.

1. You can recoup the majority of what you spend

If you take out a home equity loan to pay for a home renovation, it’s essential to understand that some upgrades are strictly for your pleasure. For example, high-end light fixtures, a house full of carpeting, or a swimming pool can add a spring to your step, but are unlikely to add much value to your property when it’s time to sell. In the case of a swimming pool, it can make your property harder to sell, particularly to buyers worried about liability or who don’t want the upkeep.

When a home equity loan is used to pay for upgrades that increase your property’s value, the loan can make sense. A minor kitchen remodel costs, on average, more than $23,000, but you’ll recoup about 78% of what you spend when

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Officials urge patience, common sense to avoid unscrupulous contractors following Hurricane Sally

In the wake of Hurricane Sally, people are going to social media and asking what fair prices are for debris removal and rooftop fixes.

Some of the prices being cited on Facebook are alarming: $25,000 to $50,00 for tree removal.

It is a situation that Baldwin and Mobile County state and local officials want to stop before it gets worse. During a news conference Monday in Fairhope, officials urged residents to “be patient” and not rush into contracts in which they feel uncertain about or in which a contractor cannot provide adequate proofs of insurance and licensing.

“We are dealing with things we are not used to,” said Baldwin County District Attorney Robert Wilters who, himself, suffered flood damage to his house near Wolf Bay. “One thing we have to be patient with is cleanup and recovery. The scammers are coming in here and are looking for people who are desperate.”

State Rep. Matt Simpson, R-Daphne, was joined by a bipartisan group of lawmakers to push for increase penalties against contractors that bilk coastal homeowners during the cleanup. Simpson was the main sponsor of HB194, which was approved by a 97-2 vote in the Alabama House on March 5. The legislation, which increased penalties against homeowner fraud, never received a vote in the Alabama Senate because the session was abbreviated due to the coronavirus pandemic.

Under the proposal, which would establish the Alabama State of Emergency Consumer Protection Act, a felony offense would be assessed against people who commit aggravated home repair fraud against homeowners following an event that was declared a state of emergency by the governor. Currently, under Alabama state law, the first conviction for home repair fraud is a misdemeanor.

“What we need to do is make sure that law enforcement has the teeth and ability to

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