For people pursuing a funding source, tapping into the value of their primary dwelling can be a good way to get some cash. With house values mounting and the economy mending, the home equity loan market has secured a serious toehold over the past few years. So why do folks opt for a home equity loan over a personal or another type of loan? And what’s their opinion of said loans?
To gauge an understanding of current customers’ perspective, LendEDU posed 15 such questions to a group of 1,000 Americans who are home equity loan borrowers. They also asked participants’ opinion of the tax code changes, with surprising answers.
The survey found that 52.2 percent of survey respondents are utilizing home equity loans to bankroll home improvements since they are usually the least costly source of funding for fixer-upper projects.
Coming in several notches below that number, 23.3 percent used their home equity loan primarily to consolidate debt, the survey indicated. That’s likely because home equity loans typically offer lower interest rates than credit cards, student loans, personal loans, and car loans.
On an especially bright note, 83.8 percent of poll takers thought the value of their home would grow over the next three years, the survey noted. Just a teensy bit fewer—81.9
percent—believed their home’s value would rise over the next five years.
When asked what they thought the value would be later on down the road, however, the numbers dipped to 74.1 percent expecting it will be more valuable in 10 years and 65.2 percent
prophesying that their place of residence would be more valuable in 20 years.
As for the changing tax law we mentioned earlier, most people don’t understand it, the survey reveals. A mere 4.4 percent of respondents correctly identified that the law would be detrimental to home equity loan borrowers by eradicating the interest deduction. And that, the survey found, could deal a blow to the home equity lending business.