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Chapter 17. Borrowing from Yourself > Borrowing from Other Sources - Pg. 173

Borrowing from Yourself 173 A bank for instance. Trot on over to your local bank and see what they have available for personal loans. If you've been a long-term customer it will be easier to chat with them about getting some help. Personal loans would include school and medical loans. Looking for a mortgage? Start your shopping here. More and more banks are not only offering first-time home buyers good deals, they're offering educational programs to help first-time home buyers learn about the various programs available. There are programs out there that require as little as three percent down to qualify for a mortgage. Banks want and need your business, because they have mortgage companies as well as mutual fund companies competing with them for your business. Warning! Beware of institutions that offer you a loan for 100 percent of the equity in your home. The interest rates they charge are higher than the banks or mortgage companies, and they are much quicker to foreclose on property if you are late in making payments. If you own your own home, you may be eligible to open a home equity line of credit, and you can use it if an emergency pops up. The bank doesn't care what you use the money for. They won't ask. You can purchase a car, fix up the house, and help the kids get through college with the money. And you can get a deduction on your income tax as well, because a home equity loan qualifies for the interest deduction. Looking for help to pay those heart-stopping tuition bills? Many schools are offering tuition loans, and you may not have to start paying them back until you get your degree or your kid does if you're helping her or him get through school. You're allowed a deduction for the interest paid on school loans whether you itemize deductions or not. This should soften the impact a bit. There are also federal and state programs available to help you get loans for school. And don't forget your employer; they may offer a tuition reimbursement plan for you, and sometimes there are even programs to help your family. Get that employee handbook out of the file and read it. There's an alternative to getting a mortgage from a local bank; try a mortgage company. Most mort- gages are eventually sold, to either the Federal National Mortgage Association (Fannie Mae) or the Federal Home Loan Mortgage Corporation (Freddie Mac). Both are federal agencies that repackage the mortgages and sell off pieces to investors. So it doesn't make much difference where you go as long as you get the best rate. The only business a mortgage company is in is to loan money for mortgages, so check them out. If you're faced with large medical bills and you're financially hemorrhaging, talk with the medical provider and set up a payment plan. They would rather get a little something each month than nothing. Bleeding you financially isn't good for their reputation. The last place on the list to look for a loan is your credit card company. If you're in need of a quick loan and are expecting you'll be able to pay it back shortly, a credit card with a low interest rate may be okay to use, but this should be your last resort. Mom and Dad (or maybe even your in-laws) would be a better source, if they're willing. Credit cards can have interest rates as high as 35 percent. Those are loan-shark rates and should be avoided at all costs.