Comparing Equity Sharing Agreements vs. Home Equity Loans
Equity sharing agreement vs. home equity loan: what to consider
When it comes to making the decision of whether to enter into an equity sharing agreement or to get a home equity loan, there are a few key things you'll want to take into account. Here's a look at some of the key considerations to keep in mind.
Deciding whether to get a home equity loan or to enter into an equity sharing agreement is a big decision. There are a few key things you'll want to take into account before making your choice. Here's a look at some of the key considerations to keep in mind.
When it comes to an equity sharing agreement, one of the key things to consider is how the agreement will impact your taxes. With a home equity loan, the interest you pay is typically tax-deductible. However, with an equity sharing agreement, the IRS may view the arrangement as a sale, which could have tax implications.
Another key consideration is how the agreement will impact your credit score. With a home equity loan, your credit score may take a hit if you're unable to make your payments on time. With an equity sharing agreement, your credit score may not be impacted as long as the payments are made on time.
Lastly, you'll want to consider the fees associated with each option. Home equity loans typically have closing costs, while equity sharing agreements may not. Be sure to weigh the costs and benefits of each option before making your final decision.
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