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How to Use the Equity in Your Home

You've worked hard to increase your home's value, and you can put your equity to work with a Home Equity Loan or a Prime Equity Line of Credit.

Equity is the difference between the fair market value of your home and the amount owed on your mortgage loan. Many people use a home equity loan or line to consolidate debt¹, finance a major renovation or purchase, pay for educational expenses, refinance an existing mortgage, or purchase residential real estate.

Debt Consolidation
When debt builds up, you can end up paying off only the interest every month, never making a real dent in the actual principal. You can potentially reduce your monthly payments by using the equity in your home to consolidate your debt into one easy-to-manage package. ¹Home equity debt consolidation allows you to:

Potentially reduce your monthly payments
Simplify finances—one payment instead of many smaller ones
Possibly deduct interest expense on your taxes²

Home Improvement or Major Purchase
A home is most people’s biggest asset. A home equity loan is one way to make a wide range of home improvements. Best of all, the interest you pay may even qualify for a tax deduction—just like your mortgage². With a home equity loan or line you could:

Build a new room addition that could keep your family happy in your home for years to come
Upgrade the floors, doors, fixtures, and appliances that may increase the resale value of your property
Improve your quality of life by building a garden or swimming pool in your backyard

The equity in your home can also be used to purchase big-ticket items.

Purchase a vehicle
Pay for the big wedding
Take the vacation you've been postponing

Educational Expenses
You can use your home equity loan or line to pay for educational expenses, such as college tuition.

Refinancing and Cash Out
Low interest rates prompt many homeowners to consider refinancing their existing mortgages. If the interest rate you are paying on your existing mortgage is higher than current interest rates, you may reduce your monthly payments by refinancing with a home equity loan.
You may benefit from refinancing if:

Current home equity interest rates are lower than your existing mortgage rate
You plan on living in your home for a number of years
You've built up considerable equity in your home

If you've built up considerable equity in your home, you may be eligible to refinance to a larger loan amount. This would provide you additional cash that could be used for debt consolidation, home improvement, or for personal use. The interest paid on your "cash out" refinance, unlike personal loans, could be tax deductible (consult your tax advisor concerning interest deductibility).

Purchasing Residential Real Estate
You can use your home equity loan or line to purchase residential real estate, like buying an investment property or a vacation home.

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¹ While consolidation may decrease your overall monthly payment obligations, refinancing pre-existing debt with a home equity loan/line will require you to give Wachovia a security interest in your home and may increase the total number of monthly debt payments, as well as the aggregate amount paid by a borrower over the term of the home equity loan or line. In Texas, debt consolidation restrictions may apply.

² Consult your tax advisor concerning interest deductibility.

All loans and lines of credit are subject to credit approval, verification, and collateral evaluation and are originated by Wachovia Mortgage, FSB, Wachovia Bank, National Association, Wachovia Financial Services, Inc., or where applicable Wachovia Bank of Delaware, National Association. Products are not available in all states and are subject to change without notice.

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