When You're Considering A Home Equity Loan

The average American has about $10,000 worth of credit card debt. Consider the high costs of daily living that can be attributed to children, food, healthcare, high gas prices plus the extras, and it's quite easy to see why many Americans are struggling. Many people have turned to their most valuable asset, their home, in order to get out of debt and to get back on track. Home equity loans have helped many individuals do just that.


A home equity loan allows the homeowner to take out the equity in their home in one lump sum. The loan must be paid back after a set period of time at a fixed interest rate. Payments must be made every month. This type of loan is so attractive because it allows the borrower to secure a big amount of cash at a low interest rate. Home equity loans can be a very good way to pay off debts, make home improvements, secure a big purchase or simply cash out.

Another great advantage of home equity loans is that the interest one pays on the first $100,000 is tax deductible. This is in contrast to credit cards or other unsecured debts, where you get absolutely no tax benefit. It is important to note that a home equity loan is a secured loan. It uses ones' home as collateral. This means that if an individual fails to repay the loan, their home will be repossessed. It is for this reason that anyone contemplating a home equity loan be absolutely sure that they can re-pay the loan.

If they later find they cannot, not only will their house be lost, but any equity as well. Home equity loans can be a good option for individuals needing to borrow money in order to pay off credit card debt, pay for college tuition or make home improvements. This type of loan allows for a big cash out at a low interest rate with tax benefits. However,

home equity loans are not without their risks. Because this type of loan uses ones' home as collateral, it is absolutely imperative that anyone who chooses to use this type of loan is able to
repay it.

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Latest Information On Home Mortgages And Expert Advice On Home Equity Loans

Latest information on home mortgages

Buying your first home is a huge milestone ? and often a scary one. Be sure you're getting the best value for your money by learning about the different types of home mortgages available today and seeing available rates from competing mortgage lenders.

There are three sides to a mortgage: the amount of money you borrow, the interest rate you'll pay on the loan, and the length of the mortgage.

The amount you borrow depends on the cost of the home and the size of your down payment. If you purchase a $300,000 home and make a down payment of $60,000, you'll need a $240,000 loan.
Mortgage Cycling Revealed. Learn How To Quickly Build At Least $40,000 Worth Of Home Equity And Pay Your Mortgage Off In 10 Years Or Less


The interest rate is one of the great variables when looking at mortgages and other home loans. There are two basic types of mortgages: fixed-rate and adjustable-rate mortgages (ARMs). Fixed-rate mortgages have just that ? a fixed rate of interest that never changes in the life of the loan, so your monthly payment will always be the same. An ARM has interest rates that tend to change according to the general credit market. This can work to your advantage when rates go down, but if market rates increase, the rates on your loan will likely increase at a similar rate. However, most ARMs have a cap on interest rates ? this will vary from lender to lender.

Nowadays buyers have much more flexibility in terms of the length of the loan. While most mortgages fall in the 15-30 year range, some lenders now offer 40 and 50 year mortgages. These longer term mortgages are ideal for people who want lower monthly rates and don't mind paying off their loan well into retirement. Of course, the longer the term of your mortgage, the more interest you'll pay in the long run.

About the Author: Find out more about Home Mortgages and Home Equity loan and compare rates from best lender in your state.

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Easy Ways To Get Home Equity Loans:

Sometime in your life you may need some extra money.
Some people get home equity loans. Equity is the difference between what you owe on your mortgage and the market value of your home. You build equity as that difference grows.
As you repay the mortgage principal to decrease the amount you owe or when your home's value increases, you build up equity.
You can borrow against it by making a home equity loan or establishing a line of credit.
Both have much lower interest rates than credit cards and personal loans. The interest you pay on a home equity loan or line of credit is usually tax-deductible.
A home equity loan provides you with a lump sum amount of cash. The terms are simple. You repay the loan over a specified time at a fixed interest rate. The payment rate is set at the time of the loan and it never changes. If the value of the loan is not greater than the value of the house, you may be able to deduct the interest on the loan.

A debt consolidation loan, another type of home equity loan,
lets you combine all your debts into one loan.
Having to make just one payment a month, you can better manage your debt.
If you're consolidating credit card bills, don't use them after you get the loan. Cut them up and destroy them. Better still,
contact the financial institutions that issued the cards and close the accounts. Otherwise, you might be tempted to overspend,
which is what got you in trouble in the first place.
A home equity line of credit has some advantages over installment loans.
There is a specified amount of money you can draw upon as you need it for up to 10 years. You only pay on the amount of credit that you use.
Payments are based on the amount you borrow and the interest has a variable rate.
As you repay the loan, you have more money you can borrow against.
Interest rates for lines of credit and payment amounts are adjustable over time.
Today you can apply for a home equity loan or line of credit online.
The minimum amount you can borrow is $5,000, although some online companies have set the minimum at $10,000.
The amount of your loan is determined by the relationship of the amount of the loan to your home's value. This is called the LTV (loan to value) ratio. Loans of $100-500,000 are not uncommon
The online process is usually very simple and takes little time.
You'll be asked some basic questions about yourself, your income and the mortgage property. Next, a copy of your credit report is obtained electronically.
You'll be asked which of your loans are related to the property being mortgaged. There will also be an electronic appraisal of your home's value.
Once the online company reviews all your financial data, it's just a matter of seconds or minutes until they approve or decline your loan
About the Author: Read more from this author at: investing-magazine.com


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