Most American homeowners have a mortgage, credit cards and insurance.

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Finance Information

All American homeowners are involved in financial activities. Most Americans use credit cards (MasterCard, Visa, American Express, Discover), and many of them need help to learn how to manage this resource. Along with credit cards, the other forms of credit include mortgages, home equity loans, short-term personal loans, payday loans and college tuition loans. Many homeowners will have the opportunity to use several of these varieties of  loans.

Married couples with substantial assets often are counseled by estate planners to create bypass trusts. These instruments are designed to reduce the estate tax that would be payable after the second member of the couple passes away. Anyone contemplating creating a bypass trust should seek competent legal counsel, because Federal law specifies some exact wording that must be included in the documents that create bypass trusts. If this wording and the required rules are not exactly spelled out, the IRS may rule the trust invalid.

Another financial instrument that most Americans have is insurance, including fire, life, health, disability, long-term care and automobile insurance. Many also have general liability insurance, often known as umbrella policies. Americans age 65 and over generally have Medicare and sometimes Medicaid.

After someone owns a home for a year or two, the value of the home often exceeds the amount that they owe on the mortgage. The family often chooses to take out a home equity loan / line of credit to obtain funds that they can use to pay off higher-interest rate loans like credit cards. In many cases, the interest payments on the HELOC are tax deductible, which creates even more savings.