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How is home equity paid out?
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If you own a home, chances are that you know there’s value in your home equity. It’s the portion of your house that you own free and clear. Moreover, you can tap into it when you need to. For example, you can use your home equity to get rid of pesky credit card debt, make home repairs or even invest in your education.
Of course, if you haven’t used your home equity in the past, you may have a few questions. One of the biggest being: How is home equity paid out? The answer depends on the way you choose to tap into it.
Discover how easy it can be to tap into your home equity now.
How is home equity paid out?
There are three common ways to tap into your home’s equity – a home equity loan, a cash out refinance, or a HELOC. Here’s how each works:
How a home equity loan is paid out
You can typically access around 80% of your home’s equity using a home equity loan. Moreover, home equity loans are paid out in a single lump sum. So, if you apply, and are approved, for a $100,000 home equity loan, you can expect to receive a single, lump sum payment in the amount of $100,000 when you close on your loan.
How a cash out refinance is paid out
In a cash out refinance, you’ll refinance your current mortgage, taking the equity you have in your home out in the process. As is the case with a home equity loan, you’ll receive a single, lump-sum payment for the amount of cash you can access upon the closing of the new loan.
Compare your home equity loan options today.
How a HELOC is paid out
Home equity lines of credit (HELOCs) are similar to home equity loans and cash out refinance options in that they use your equity as security for the loan. However, they differ in that a HELOC is a revolving line of credit.
In most cases, HELOCs have a draw period that lasts anywhere from five to 15 years. During this period, you can borrow the money you need up to your credit limit – typically around 80% of your available equity. So, if you have a $50,000 HELOC, you can borrow and repay up to $50,000 as many times as you’d like during the draw period. Moreover, you’ll typically make interest-only payments while the loan is in the draw period.
When the draw period ends, the repayment period starts. During this period, you’ll usually be required to make payments toward interest and principal until the loan is paid in full.
Which option is better based on how they’re paid out?
Whether a home equity loan or HELOC is better based on how they’re paid out depends on what you plan on using the money for. For example, if you need money to consolidate high interest rate debt, you’ll need a large lump sum of money up front. In this case, a home equity loan may be your best option.
On the other hand, if you’re using the money to renovate your home, a HELOC may be better. After all, you never know how much renovations will cost in the end. So, having the ability to access additional funds during the draw period may come in handy.
How the money is paid out shouldn’t be your only consideration
It’s important to consider how you can access money when it comes to choosing the best avenue for tapping into your home equity, but that shouldn’t be your only consideration. Here are a few other factors to think about when you decide whether a home equity loan, cash out refinance or HELOC is the better option:
- Impact on your current mortgage: If you purchased your home at least a couple of years ago, chances are you have a lower interest rate than is currently available. So, a cash out refinance may not be a wise idea. Consider a home equity loan or HELOC in these circumstances instead.
- Interest rates: Home equity loans generally come with fixed interest rates while HELOC rates are usually variable.
- Payment structure: When you take out a home equity loan, you’ll know exactly what your monthly payment will be. Since HELOCs are revolving credit lines with variable interest rates, their payments are typically variable as well – which can make budgeting more difficult.
Compare your home equity options now.
The bottom line
Different home equity products pay out in different ways. Although it’s important to consider how you’ll receive your money, you should also consider other factors. Make sure to compare your options in terms of fees, interest, payment structure and the potential impact on your current mortgage before you decide which home equity product is right for you.
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Malaysia agrees to launch new search for MH370 plane, which vanished a decade ago with 239 people on board
Malaysia announced on Friday it has agreed to launch a new search for Malaysia Airlines flight MH370, which disappeared 10 years ago in one of aviation’s greatest enduring mysteries.
The Boeing 777 carrying 239 people disappeared from radar screens on March 8, 2014 while en route from Kuala Lumpur to Beijing.
Despite the largest search in aviation history, the plane has never been found. Malaysia’s prime minister said 17 days after the plane disappeared that, based on the satellite data, his government had concluded that the plane crashed down in a remote corner of the Indian Ocean, and that there were no survivors.
Transport Minister Anthony Loke said Malaysia had agreed to a new search operation by maritime exploration firm Ocean Infinity, which also carried out an unsuccessful hunt in 2018.
The company’s first efforts followed a massive Australia-led search for the aircraft that lasted three years before it was suspended in January 2017.
Loke said a new 5,800 square mile area of the southern Indian Ocean would be scoured by Ocean Infinity, which is based in the United Kingdom and United States.
“The new search area proposed by Ocean Infinity is based on the latest information and data analysis conducted by experts and researchers,” Loke said.
“The proposal for a search operation by Ocean Infinity is a solid one and deserves to be considered,” he told reporters.
The government said it agreed to Ocean Infinity’s proposal “in principle” on December 13, with the transport ministry expected to finalize terms by early 2025.
The new search will resume “as soon as the contract is finalized and signed by both parties”, Loke said.
“They have informed us that the ideal time for the search in the designated waters is between January and April. We are working to finalise the agreement as quickly as possible,” he added.
“I truly hope there will be an end to the loss of MH370. May all questions be answered,” Malaysian Rosila Abu Samah, 60, the stepmother of one of the passengers, told AFP.
Supian Ahmad/NurPhoto/Getty
Malaysian Shim Kok Chau, 49, whose wife was a flight attendant on the ill-fated flight, said he had come to accept her fate but hopes to know what happened to the plane, “why it happened and who did it.”
Among the other victims was a celebrated group of 24 Chinese calligraphy artists coming from an exhibition of their work. Two young Iranian men on the plane, 18-year-old Pouria Nour Mohammad Mehrdad and 29-year-old Delavar Seyed Mohammadreza, were traveling on stolen passports to seek better lives in Europe.
Two of the U.S. citizens on the plane were young children, Nicole Meng, 4, and 2-year-old Yan Zhang.
Philip Wood was the only American adult on the flight. The IBM executive had been living in Beijing and was planning to relocate to the Malaysian capital with his girlfriend, Sarah Bajc.
“No find, no fee”
The new search will be on the same “no find, no fee” principle as Ocean Infinity’s previous search, with the government only paying out if they find the aircraft.
The contract is for 18 months and Malaysia will pay $70 million to the company if the plane is found, Loke said.
He said the decision to agree to a fresh search “reflects the Malaysian government’s commitment to continuing the search operation and providing closure to the families of the MH370 victims.”
The original Australia-led search covered 120,000 square kilometers in the Indian Ocean but found hardly any trace of the plane, with only some pieces of debris picked up.
In July 2015, an airplane fragment later confirmed to be a flaperon from MH370 was found washed ashore on the western Indian Ocean island of Reunion. It was the first hard evidence that the plane had gone down in the area. More debris was later found washed up on the coast of eastern Africa.
YANNICK PITOU/AFP/Getty Images
The plane’s disappearance has long been the subject of theories — including that veteran pilot Zaharie Ahmad Shah had gone rogue.
A final report into the tragedy released in 2018 pointed to failings by air traffic control and said the course of the plane was changed manually.
Asked if he was confident the plane will be found during the new search, Loke said: “At this point, no one can provide guarantees.
“It has been over 10 years, and it would be unfair to expect a concrete commitment. However, under the terms and conditions, any discovery must be credible. It cannot just be a few fragments; there are specific criteria outlined in the contract.”
A Utah mother who police believe was shot and killed by her husband along with three of their children was a refugee who fled violence in Myanmar and dreamed of thriving with her family in the U.S., relatives said Thursday.
Police believe the husband killed his family before shooting himself, and a teenage son was badly wounded.
The bodies of Bu Meh, 38, along with her daughters Kristina Ree, 8, and Nyay Meh, 2, and son Boe Reh, 11, were found in their home in West Valley City, a Salt Lake City suburb, on Tuesday. A handgun was found under the father Dae Reh, 42, leading police to believe this was a murder-suicide, but no evidence of a motive has been released.
One child, 17-year-old Sha Reh, survived being shot in the head and is hospitalized with a severe brain injury, police said.
Bu Meh, a member of Myanmar’s Karenni ethnic minority, fled what her relatives described as ethnic cleansing in the Southeast Asian nation about 10 years ago. She and her small family lived for a time in a refugee camp in Thailand, then came to the United States “with little more than the clothing on their backs,” the family said in a statement.
She taught herself English, learned new skills and worked hard to support her growing family, achieving a way of life “far beyond the nightmare of her former country or the refugee camp,” the family said.
“For reasons that we cannot comprehend, her husband robbed her and their children of that security and their very lives,” her family said.
Police believe the shooting happened over the weekend.
Police initially went to the home Monday night after a relative asked them to check on the family but did not find any sign of an emergency that would allow them to enter the home. The relative went to the home Tuesday, saw Sha Reh wounded in the garage and called police, who found the bodies inside the home.
In their statement, relatives called Sha Reh their hero and said he faces a “long and complex road to recovery.” An online fundraiser is collecting donations to pay for his care and to help him go to college.
“After moving into their own home and finally enjoying a level of prosperity far beyond the nightmare of their former country or the refugee camp in Thailand in which they lived for a season, and for reasons that we cannot comprehend,” the family wrote, “her husband robbed her and their children of that security and their very lives.”
Neighbors hadn’t reported any gunshots in the area over the weekend, police spokesperson Roxeanne Vainuku said at a news conference Wednesday. The family had no previous reports of domestic violence or other disturbances.
One neighbor spoke to CBS affiliate KUTV about the shock they felt.
“How can a father shoot his children?” neighbor Mike Webster told the station. “I just can’t grasp for that concept at all. I can just see that poor little two-year-old looking at her daddy.”
This Utah case is the 38th mass killing in the United States this year. At least 165 people have died this year in U.S. mass killings, which are defined by the FBI as cases in which four or more people die within a 24-hour period, not including the killer.
Mark Barden, whose child was killed in the 2012 Sandy Hook school shooting, urged Utah lawmakers to pass Red Flag laws after the incident in Utah, KUTV reported.
“When it is recognized that an individual is in crisis, measures to safely and temporarily remove firearms from their possession are proven to save lives,” Barden said.
A journalists’ association says two journalists working for Kurdish media outlets were killed in northern Syria while covering fighting between Turkish-backed fighters and Syrian Kurdish militia.
The Turkey-based Dicle-Firat Journalists Association said Friday that Nazim Dastan and Cihan Bilgin were killed Thursday when their vehicle was reportedly targeted by a Turkish drone on a road near the Tishrin Dam.
Tishrin Dam, located some 56 miles east of Aleppo, has been the scene of clashes between the U.S.-backed Syrian Democratic Forces, SDF, and the Turkey-backed opposition forces.
There was no immediate comment from Turkish officials.
Bianet, a news website dedicated to human rights issues, said Bilgin was a reporter for the Kurdish Hawar News Agency, while Dastan worked as a freelance journalist for the Firat News Agency, which is associated with the militant group, the Kurdistan Workers’ Party (PKK).
Turkey considers the SDF a terrorist organization because its main component is a group aligned to the PKK.
The group has been engaged in an armed struggle against the Turkish state since the 1980s in pursuit of its objective of securing autonomy for Kurds in the country.