Equity Loan Options

What is a Home Equity Loan?

Thu, 25 Aug 2011 14:44:27 +0000

A home equity loan is very similar to personal bank loan. According to Wikipedia a home equity loan (sometimes abbreviated HEL) is a type of loan in which the borrower uses the equity in their home as collateral. These loans are useful to finance major expenses such as home repairs, medical bills or college education. A home equity loan creates a lien against the borrower’s house, and reduces actual home equity (a lien is a form of security interest granted over an item of property to secure the payment of a debt or performance of some other obligation. The owner of the property, who grants the lien, is referred to as the lienor and the person who has the benefit of the lien is referred to as the lienee).

Even if you have a bad credit you can get an equity loan. Lenders will approve a home equity loan because there is a collateral, the loan is secured by the property. On the otherhand obtaining an equity loan with a low credit score the lender may ask a higher mortgage rate.

HOW MUCH WILL MY HOME EQUITY LOAN PAYMENT BE?

Wed, 24 Aug 2011 22:01:35 +0000

HOW MUCH SHOULD I BORROW?

How much, you ask? Lets take a look …Lets say you owe $19,500 or so in credit card debt. That’s a significant sum to most folks. Now lets say that the credit card company is charging you 11.4% interest–not a great rate, to be sure. In this case, you might be paying more than $180 per month in finance charges. If you make the minimum payment of $200 per month, you’ll likely never pay the loan off. Divide that $19,500 by $20 of principal per month and you’ll end up with 975 months … that’s 81 years and change. 81 YEARS.

If you take out a ten-year home equity loan at say 5%, your monthly payments may be in the same $200 ballpark. The difference is that a larger portion of your payment each month will go towards paying down your principal. If you make only the monthly payment each month, you’ll retire the home equity debt in ten years.

Is it easy to qualify for a Home Equity Loan?

Wed, 24 Aug 2011 21:58:55 +0000

By applying for a home equity loan you already know that one advantage of getting this type of loan is that it is a relatively quick and easy way to get the cash you need soon at a very low interest rate. Because you have already established equity in your home this type of loan can be approved very quickly. In addition to fast cash accessibility, you are going to save money by paying less on interest. Think about it…if you use your charge cards, the interest rates are probably going to be higher than any other type of loan you may be thinking of taking out. Another advantage of getting home equity loans is the possibility of the interest that is paid being tax deductible. Many people do not know this, so be sure to check with a tax professional on what is required to do this. You should continue to research and learn about home equity loans, home equity line of credit, or home equity loan refinancing.

Equity Loan options

Wed, 24 Aug 2011 20:59:43 +0000

Drowning in debt? Home equity loans are one of the most popular ways to clean up personal debt while lowering monthly payments. When you take out a home equity loan, you borrow against the equity in your house. The loan is secured by a mortgage lien. There are two primary advantages of home equity loans: the interest paid may be tax-deductible, and the interest rate is often just a fraction of that paid on a typical credit card account. Both of these factors can add up to significant savings for borrower.

Homeowners often use the funds from their home equity loans for debt consolidation, home improvements, or other big-ticket purchases. Loan offers can come from many sources: from local banks, through direct mail, and via the Internet. With so many options, choosing the right loan and the right lender can be a difficult decision. But the bottom line remains clear: you can save a considerable amount of money.