HELOC or home equity line of credit is one where the lender agrees to lend maximum amount within a mutually agreed time span. The period is called a term and the collateral is the equity of the borrower on his or her house.

Use of Home Equity

Home is the most valuable possession for any person and that is why it is usually made the equity only in case of major loans only. Cases in which the home is used as collateral are -For meeting the educational expenses of the children.For improvement of home or renovation works.For marriage and such other occasions.For footing unforeseen medical bills. Any contingent situation where the expenses cannot be deferred for long.

HELOC Abuse

However, for day to day expenses, or meeting the smaller bills home is not used as the equity by the borrowers. When it is done or the equity home loan is obtained for trifle uses, or HELOC is abused, it is referred to as subprime mortgage crisis.

HELOC Features

Main features of HELOC are -It is a line of credit that is extended with the borrower’s home as collateral.After establishment of maximum loan balance, homeowner may draw on the line of credit at his or her discretion. Interest could either be fixed or variable on such mortgage finances.Usually interest is based on prevailing prime rates and borrower should remain updated on current mortgage news and rates. Once there is a balance on the loan, the homeowner has the option to choose the repayment schedule so long as the minimum interest payments are made on a monthly basis. HELOC terms of repayment could be anything in the range of 5-20 years. At the end of the time span the loan has to be repaid in full.

Conventional Loan and HELOC Compared

Differences between HELOC and traditional home equity loan are as follows.In HELOC borrower is not given the entire advance upfront. HELOC funds should be drawn during the draw period of 5-25 years.Repayment is made considering the principal with interest. HELO often has a monthly payment requirement that might be confined to interest only. Debtor is allowed to make repayment of any amount at any time during the time span which should be less than the total outstanding amount.

Full amount is payable at the end of the period and balloon payments can also be made to reduce the overall payables.

Like most people, you have probably heard a lot about online banking. Most of the major banks are offering the convenience of banking online. If you have not tried online banking you are probably still banking the old way – paying your bills by mail and going to your local bank branch to make deposits. You may look online for information regarding a mortgage, life insurance, or a personal loan, but when it comes time to make a move, you feel more comfortable dealing with an actual person – a banking associate or your insurance agent.

Why Use Online Banking

For years the banking systems have used computer networks to automate their daily transactions; improving with the changing times. Today, advanced technology gives you the option of bypassing the traditional banking – standing in lines, filling out deposit slips, going to your branch to withdraw money, and so on. Online banking allows you to manage your finances quickly and more efficiently.

Banks view the online option as an added value to attract new customers and retain the old ones. This method of banking helps to keep costs down by eliminating the paper trail and teller transactions associated with traditional banking.

How safe it is to bank online?

The banking industry is faced with the challenge of designing a system that is customer friendly and secure. They take every available precaution to ensure your transactions are secure.

To attract customers and lead them to online banking, many institutions offer added values such as free checking or “limited time offers,” for signing up and using online services. Many of the larger banks offer fully function net banking enabling you to view your account balance and history as well as apply for loans, work with your IRA and CD’s right from your desktop.

Advantages of banking online

* Convenience: Your online bank never closes; you have access to your account 24 hours a day, seven days a week. * Availability: If you’re out of state or out of the country, you can instantly log on to your net bank and take care of business, 24/7. * Quick Transactions: Online bank sites generally execute and confirm transactions at or quicker than ATM processing speeds. * Efficiency: You can access and manage all of your bank accounts, including IRAs, CDs, even securities, from one site. * Effectiveness: Many net banking sites now offer sophisticated tools, including account aggregation, rate alerts, stock quotes, and portfolio managing programs to help you manage your assets more effectively. They are often compatible with programs such as Microsoft Money or Quicken.

Disadvantages of online banking

* Start-up time: In many cases, you will have to go to a branch and provide identification before registering online. * Learning curve: At first glance, banking sites can appear difficult to navigate at first. Most often tutorials to help you through this process. Once you have learned how the system works, you can complete your banking in minutes. * The trust factor: This is a big mountain to climb for most people. Learning to trust the banking online system just takes some getting used to. Did I push the transfer button once? Did my transaction go through?

Some welcome the change; others are still a bit hesitant. As with anything the deviates from the norm, it takes some getting used to. Once you are familiar with the process, you will wonder how you ever lived without it.

The IRS and several states have an option known as Innocent Spouse Relief to help individuals who have found themselves saddled with back tax debts associated with a husband or wife’s filing error. Those who qualify for this plan can avoid paying potentially steep interest and fines.

Owing back taxes is stressful enough when they are legitimately your responsibility–but what if you’ve found yourself pursued by tax officials for liabilities, interest, and penalties that aren’t even your fault? This unfortunate scenario sometimes occurs when an inaccuracy is detected in a tax return that was filed jointly by a married couple, or if that tax return was filed correctly but the taxes were never fully paid. If your spouse made an error while performing tax duties or filed dishonestly, you may have a chance at being absolved from accountability via Innocent Spouse Relief.

When a husband and wife file their taxes together, the IRS views both parties as equally responsible, regardless of who earned what amount of the joined taxable income. If a problem is detected in a joint tax return, both parties will be pursued individually for the penalties. Many times, one spouse feels that they should bear no personal responsibility for the back taxes owed by their current or former significant other. In these cases, a spouse who feels that they are not responsible for the error may choose to file for Innocent Spouse back tax relief. If they quality for this option, the innocent spouse could either be absolved of the total amount owed or have each spouse named legally responsible for their own share of the taxes and associated fees.

Each Innocent Spouse Relief case is different, and not every situation qualifies for this plan. A tax attorney or other tax professional may be able to guide you through the particulars of your specific circumstances and determine the best course of action. There are three types of Innocent Spouse Relief:

Classic Innocent Spouse Relief–This typically applies to couples who have, intentionally or unintentionally, misrepresented their taxes by reporting less than they should have by way of omission, understatement, or error. The IRS uses a variety of factors to determine whether or not the party claiming no responsibility can legitimately not be held liable for paying back taxes, penalties, and interest.Relief by Separation of Liability–If the spouses are legally separated or divorced, they may be able to be absolved of one another’s tax liabilities and held responsible for only their own if they qualify for this back tax help plan.Equitable Relief–Sometimes back taxes are owed not because of an error in the initial filing, but simply because the full amount was never paid. The IRS will examine your situation and decide whether or not your case justifies equitable relief.

Having to pay exorbitant back taxes and penalties could result in long-term financial stress. Don’t let a spouse’s error or deception harm your financial future. If you’ve found yourself caught in this difficult situation, be sure to research your options. Choosing to learn more about innocent spouse relief and other back tax relief programs from your local tax lawyers or other resources could be the best thing you’ve ever done for your wallet. If you have found yourself under scrutiny by the tax officials, but do not qualify for Innocent Spouse Relief, you may want to consider some of the following options:

Offers in compromisePenalty abatementProperty lien releasesWage garnishment reliefAnd more

Remember: when you need relief from back taxes, there is no substitute for professional guidance from a licensed CPA or tax attorney.