excel data functions and amortization schedules

In a rising-rate environment, this could mean larger monthly payments.Īdditionally, once the draw period ends borrowers are responsible for both the principal and interest. HELOCs are variable-rate loans, which means your interest rate will adjust periodically. There are two reasons for this: adjustable rates and entering the repayment phase of the loan. HELOC payments tend to get more expensive over time. If a HELOC is your only option for paying for a vacation or another big-ticket item, better to put the purchase on hold.

A Caribbean cruise or a gaming console, on the other hand, will be long forgotten even if you’re paying it off for decades.

Going on vacation or buying electronics: Hard no. Real estate is a long-lived asset that will give you years of use and almost certainly gain value.

Federal loans have lower rates and more safeguards around financial hardships, so there’s no hurry to pay them down. In contrast to federal loans, private student loans carry higher rates and less flexibility. If you owe student loans from private lenders, it can make sense to pay those down by tapping home equity.

Paying down student loans: Maybe. This one is a bit of a gray area.

However, using a home equity line of credit at 7.5 percent today probably isn’t ideal. Investing: Probably not. Tapping home equity at 3 percent to fatten up your retirement savings made sense.Otherwise, you’ll have the unfortunate combination of less home equity and an overhang of credit card balances. This strategy comes with a big caveat, however: Pull cash out of your house to pay off the credit cards only if you’re not going to simply run up more debt. Consolidating debt: Maybe. If you’re carrying credit card debt and paying double-digit interest rates, it could make sense to swap out expensive revolving debt for cheaper HELOC debt.However, be careful about using HELOCs to add a swimming pool or tennis court - these additions are expensive, and homeowners usually don’t recoup the full amount of the investment. If you need a new air conditioner, for example, a HELOC is cheaper than carrying a credit card balance. These upgrades add to functionality and (generally) the resale value of your home. Home improvements and repairs: Yes. Using home equity to pay for kitchen renovations and bathroom updates is a no-brainer.A few options, and whether they make sense: That’s a lot of financial freedom, so it’s useful to have some guidelines about how to spend the money. You can use the proceeds from your HELOC for anything.

Excel data functions and amortization schedules