Home Equity Loans

Home Equity Loans
A home equity line of credit or loan allows you to borrow money, using your home's equity as collateral.  Collateral is property that you use to guarantee that you will repay your debt.  Equity is the difference between how much you owe on your mortgage and how much your home is worth. It is the cash you would have if you sold your house and paid off your mortgage loans.

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A home equity loan is a one time loan amount that you repay over a determined amount of time.  You can not borrow more from the loan once you receive your money.

A home equity line of credit lets you borrow and withdraw a certain amount of money as you need it for the time span of your loan.  You may use the credit again as you pay off the principal.

With a home equity loan or line of credit you can easily turn your home’s equity into money that can be spent to finance major purchases and expenses such as a child’s college education, home improvements, new cars, or for debt consolidation.

However, be cautious in taking out such loans.  Home equity loans can reduce or may even eliminate the equity that you have built up in your home. Also, if you are unable to repay your debt, your lender can take your home and sell it to get back the money that has been loaned.

Before deciding on a home equity loan consider the following:

  • Compare home equity loans offered by at least four reputable lending institutions. 
  • Consider all the costs before you agree to a loan - the interest rate on the loan and the annual percentage rate (APR), which includes other costs, such as origination fees, discount points, mortgage insurance and other fees.
  • Ask if the rate changes, and if so, how it is calculated and how frequently, as this will affect the amount of your monthly payments.
  • Read carefully all terms or conditions of the loan seeking clarification on any items you do not understand.
  • Never sign any loan documents that you have not carefully read or that has blank spaces to be filled out after you sign. 
  • Make sure that you will have enough income to make your monthly payments.
  • Commit to keeping careful records of billing statements and payments.
  • Remember that a home equity loan is really a second mortgage on your home.
  • Do not let the promise of extra cash or lower monthly payments cloud good judgment.  Ask yourself if the cost you will pay for the loan is really worth it.

Home equity loan quotes and rates are available and convenient to access right here online, in a very fast, easy, and risk free way.  Explore the possibilities and see if a home equity loan or line of credit is right for you.
















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