Why a home equity loan could be your answer to debt consolidation

Consolidation is now a possibility

With rising default rates and delinquencies, most people today are finding it increasingly difficult to manage their finances. From existing loans to credit cards to even medical expenses - the average cost of living seems to have skyrocketed in all quarters. That's where a home equity loan can come to the rescue. Every month the prospect of having to pay multiple bills of varying amounts can be a huge difficulty. Not only is it difficult to keep track of all these bills and expenses, the cumulative costs can work out to be very high. With a home equity loan you can pay just a single bill every month. This will help you plan finances and get you more organized as well.

Reduced interest rates

Most of the time existing credit card debts, loan outstanding amounts and other liabilities can involve huge interest rates and high expenses. A home equity loan can actually provide a reduced interest rate. The best thing is you get the entire loan amount in a lump sum. This helps you pay for any expenses towards your liabilities. You also get some extra cash at hand.

Tax savings

A home equity loan has a tremendous benefit in that it provides for significant tax benefits. You get to deduct your interest amount if you have a home equity loan. This is if the home equity loan is being used for purposes like education, consolidation of debts or even for the improvement of the home etc. You can consult with a tax advisor to check the possibilities.

Customized loan

The best thing about a home equity loan is that you get to choose the type that suits your unique requirements. You can choose a home equity loan with a fixed or adjustable interest rate. The fixed rate will entail a designated monthly payment that does not vary with time. The adjustable rate will vary depending on market conditions. You can also have the option of getting an adjustable rate home equity loan with a rate cap that has been established beforehand.

Free up cash

With a reduced interest rate and longer payment period, a home equity loan can offer significant advantages. For example for starters, it frees up extra cash - so that you can utilize this amount for any home improvement modifications - like maybe doing up the kitchen, or getting new furniture etc. Suddenly getting a home equity loan seems rewarding because now you not only get to pay off all your debts, you also actually get some cash at hand to use for other important things!

by shee

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Bad Credit Home Equity Loans: Fund Against Your Home Equity

Bad credit home equity loans refer to a kind of money provision which provides you fund against the equity value of your home without considering that how bad is your credit status. The loans are secured and facilitate you with a number of benefits. If you have your own home then, you can avail these loans.

The loans can be taken to fulfill any of your personal needs like refurbishing your home, paying medical bills wedding, education fee, consolidating you debts and so on. There is no such restriction for use of these loans.

Bad Credit Home Equity Loans are secured loan so even if your credit status is not in sound financial status still you can avail the fund against your home. Besides availing fund, you can also improve your credit status for smooth future lending. Thus the loans give you one extra benefits besides providing you fund. Bad credit home equity loans possess many distinguished features:

* It allows you to avail large sum of money with flexible repayment tenure and low rate of interest. You can avail amount up to £75000 under these loans.

* It offers you to choose the repayment tenure of your choice. However, the normal period ranges from 5 to 25 years.

* Its low rate of interest coupled with long repayment tenures keeps your monthly outflow under control and you pay the installment smoothly.

* You get opportunity to uplift your credit status. As the loans acts also as a financial tool. By making repayment on time, you can improve your credit status which will keep your future lending smooth,

Bad credit home equity loans are available offline as well as online. Before applying, a close familiarity with prevailing trend of financial market is essential. Through online survey, you can get a fair idea of loan market with different competitive loan quote. Comparing them in terms of better deal will lead you to choose the best loan program.

by Johns Tiel

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Bad Credit Home Loans

There was a time that seems like decades ago when people with less than pristine credit were not able to get home loans. At that time people with bad credit were all but assured that their dreams of homeownership would never come to fruition. Luckily, for many people, those days are long gone.



Homeownership is possible for people with bad credit and no credit history at all thanks in large part to a multitude of loan packages made available by countless lenders. Good people with bad credit can now get approved for mortgages and despite what you may have heard from a well intended but misinformed friend or family members, these loans can be at very competitive rates.



In today's economy if mortgages were made available only to people with pristine credit, the real estate market would collapse. There are simply not enough people in America today with pristine credit. Lenders were forced to create packages available for people with bankruptcies, bad credit histories or no credit histories at all. To remain competitive lenders had to create these packages and you can be the beneficiary of them.



Though it is true that some packages remain available only to those with excellent or very good credit, there are just as many, if not more packages that are made available to people with mediocre or poor credit, including past bankruptcy. These packages are available at all different interest rates and nuances that allow greater flexibility in coming up with a package that makes sense for you.



Lenders are now looking at an overall loan application including income, credit history, appraised value of the home and selling price. They will examine how recent or far back your credit problems occurred. They will consider the instant equity in the home (appraised value versus selling price), as well as your income and ability to pay your monthly payments. When looking at income they can, if you want them to, consider all forms of income.



The more recent the bad credit in your credit reports are the tougher it may be to get approved for some packages, but it is still not impossible. You will want to have a good sense of what is in your credit report so you are prepared to correct any problems in the report. There are countless credit repair programs available that will help you improve your credit score.



Past bankruptcies are not necessarily a death sentence for homeownership and depending on how long ago they occurred they may not hinder the mortgage process at all for you. It is always important to keep copies of your discharge papers and a complete record of your bankruptcy. Your lender may require copies of some of the documentation. They will want to see exactly what was discharged. If there was a mortgage that was discharged in bankruptcy it will impact which mortgage packages are made available to you, but even then there may be mortgage packages that you can still be approved for.



It seems all too often that people with bad credit feel that they are unable to get beyond their past. Owning a home and showing on-time mortgage payments is a good way to improve your overall credit portfolio. If you are approved for a mortgage and show payments being made on time this will go along way towards improving your credit scores and improving your overall financial picture.



When applying for home loans, do not try to hide your credit history, invariably they will uncover any and all skeletons you hoped were in your credit closet. You are much better off being open and honest with your mortgage lender. A good mortgage lender will know exactly what packages they can look into for you if you give them an honest and realistic picture of your credit history and other financial matters. Tell them what is wrong in your credit report and can be fixed, what is accurate and cannot be fixed and what you are unsure about. Some lenders will allow an explanation, including proof, of incorrect items on your credit report and look beyond them while evaluating your loan. Dishonesty, however, can hurt you in the long run so be completely honest with the lending institution.



You can also consider using a co-signer for the loan who has a stronger credit history in some cases. You may be able to have them cosign the loan for a period of time and then you can refinance the loan in your name only once your credit history has been improved. This has become more common with first time homebuyers. The refinance market is strong and there will always be the opportunity to do just that.



The simple fact of the matter is that there are countless loan packages available to people with bad credit or no credit history. These loan packages can help you whether you have a large down payment, a small down payment or no down payment at all. Speaking to a mortgage lender or network of lenders that have many packages at their disposal will help you begin to realize your dreams of homeownership and put you on a path towards a much brighter financial picture.

by Ethan Hunter

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Reaping financial rewards - bad credit home equity loans

Home is the place you inhabit. It is the place where you live, breathe, grow, thrive. It does more than just providing a living space. The moment you build up this house, or moved to your present apartment, you did not realize that you have struck it rich. 'Rich' - that is not the exact word to define your current status as you are struggling with bad credit. I know you want to argue on this point but let me explain. There is something called home equity that lies in the embryonic state waiting to be germinated. Home equity has more to it than what meets the eye. However, many of us do not understand the meaning of home equity. Let alone use it for their own prosperity.



Let us begin with the fundamentals. Home equity is the difference between how much the home is worth and how much you owe on the mortgage (or mortgages, if you have more than one on the property). A home equity loan or line of credit is a loan that facilitates the borrowing of money using home equity as collateral. A home equity loan is in essence a secured loan. Accordingly aborting the repayment agreement will result in seizure of your property or home. That you certainly don't want since you already have been suffering due to bad credit. Confiscation of your property is the one thing you don't want on your list of financial fiasco. Thus careful introspection is recommended in relation to bad credit home equity loans. A key word that might be encountered by you is home equity line of credit. It is categorized as the kind of home equity loan. A HELOC or home equity line of credit allows the loan borrower to borrow various sums up to a fixed amount over a period of time. A home equity line of credit works in a way which is analogous to a credit card; you use it when you need it. Different States set their own laws on limits you can borrow against your house.



Bad credit home equity loans can be used for any personal reason. Bad credit home equity loans are second mortgage that converts your home equity into ready money. This cash can be used for many purposes like home improvement, debt consolidation, college education, and any other expenses. There is no expiration to possibilities to a home equity loan. Tapping on the home equity with bad credit is effortless if the loan borrower understands his own expectations and status in the context of bad credit home equity loans. Bad credit home equity loans are currently very attractive but then again you what is good for someone else might not be good for you. So bad credit home equity loans should be contemplated seriously before taking a concrete decision. You don't need another bad decision on your credit report, so chose wisely.



Bad credit has unwelcome consequences on your entire investments plan. This includes your plans for taking a home equity loan. You might have blundered earlier but this time it is our home which is at stake. Discuss your bad credit with the loan lender you are opting for. Commissioning the right loan lender is crucial for your bad credit home equity loan. In fact it is the thing that guarantees your success in acquiring bad credit home equity loans.



Little do people realize that home equity is a powerful tool for making a statement while placing a loan application. Bad credit home equity loans have a very high incidence of being the finest option of people contemplating debt consolidation. You success with bad credit home equity loans rests on the simple fact that you make a plan and cling to it religiously. The credit card debts have been weighing heavily on you. Those irksome little debts, those just hamper your personal expenditures in every possible way. Get rid of them this time with bad credit equity loans. Let you wallet weigh less of credit card debts and more of ready cash for you personal usage.



Bad credit home equity loans have this great opportunity for home owners. Bad credit home equity loans can be used fittingly for the purpose of home improvement. Make the minor little changes that you have been putting off due to this bad credit. There is an added benefit. You build up your equity while using equity for in your home. Bad credit home equity loans can even help to fund your vacation. Clasp the snow stricken mountains, or go for a dip in the clear blue waters of the Caribbean islands. It can all be realized through home equity loans even if you can't shed off the bad credit tag.



A very congruent utilization of bad credit home equity loans is for initiating a retirement plan. Retirement is to be realized some day. A lot depends on how you are planning your retirement that will reflect on your financial independence in the future. Many bad credit home equity loans have been used to proffer investments. A trusted loan lender or financial advisor can advice you suitably for your current financial status. Make a bad credit home equity plan and see how it can reap economic rewards.



Economic rewards! Does that come with bad credit? You are throwing your hands up in the air and saying 'no way'. 'No way' but you have read all about it. Haven't you? You see the house you are standing on, now see the four walls surrounding it. Yes this house, your house that you own. There is a gold mine hidden there in terms of home equity. And you were searching the road to Eldorado.

by Amanda Thompson

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Home Equity Loan online: Get the best out of your home.

It is quite natural that while using the house as collateral for the loan, the first and foremost thought that comes to our mind is to secure it from the lenders. Succeeding that, our secondary concern is to derive maximum benefits from lenders. Thus, it is now possible to derive various benefits in a particular loan scheme when applied for home equity loan online. But before applying for such loans, it is indeed helpful for one to have some knowledge concerning to equity.

home equity loan online is a loan which you can avail by pledging the equity on your home as collateral. Home equity is the market value of your home free from any mortgage claim or any other obligation on it. For instance, the actual cost of your home is £170000 and there is a mortgage claim of £70000 on it, then the equity on your home is £100000.

The most attractive and beneficiary feature of home equity loan online is that home-owners retain the ownership of the house partially while borrowing loan. And also the house owners need not have to move their house even it is used as collateral. But, once the loan is paid back, the home-owners enjoys over the ownership of the house.

The amount that you can borrow with the help of home equity loans online entirely depend upon the equity of the house. If the house carries a higher equity value, then you can borrow high amount of loan. But in general, the amount that you can borrow under the scheme is limited to £ 1,00,000 for a long duration. The term of repaying the loan does not extends more than 25 years from the date of approval.

When you don't want to take out the loan amount at one go, you can opt for HELOC. That is from an agreed sum, you can withdraw the desired amount when you need it. Interest rate is calculated on the individual withdrawn amounts.

As every applicant have to place collateral, so lenders are less concerned about the bad credit tags. Home equity loan online can be approved in spite of having CCJs, defaults, arrears, late-payments and such bad credit scores.

Home equity loans online are the perfect loans for all those home owners who are looking for additional finance. Because of the collateral present these loans are available in the affordable interest rates available.

by Dina

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Know about Home equity loans California

Home equity is the value of your home less the amount of money that you still owe on it. Home equity is one of the smartest, cheapest, and easiest ways to use the money you need to help you to fulfill your. Financial needs. an easy method for determining your home equity is to subtract the amount of the mortgage balance from the current fair market value of your home. Home equity is determined by deducting what you owe from what your house is worth. This type of loan can also be calculated by subtracting the amount still owed on all outstanding loans against the property from the fair market value of the property. Loans like this are a wise lending product and a great resource if you know the facts.

Types of home equity loans

There are various types of home equity loans which are very beneficial for a laon borrower like home equity line of credit. Using home equity line of credit you can finance things like home improvements, paying off debt, buying a second home, purchasing a new vehicle. Also It can help you to pay off their big interest rates, . If you want to repair your house It will also be the best option. It can also help you to consolidate derbts .Using a home loan to substitute a number of credit cards and other high-interest debt has plenty of advantages. Besides the interest you pay on a equity loan is tax deductible where as the interest you pay on credit card debt is not. Make use of A Home Equity Loan As debt consolidation Loan managing and understanding debt is crucial to financial security and well being. Like any other debt, a home equity loan should be used sparingly.

Interest rates of home equity loans

Interest rates on short-term equity line of credit have increased even though the housing market is slowing, which means that homeowners will have less of a cushion to fall back on should they be unable to repay borrowed money. Still, home-equity loans and lines of credit are often the best attractive option for homeowners who are looking to borrow, and traditional cash-out refinancing of first mortgages has fallen out of fashion since rates began to rise. The loan's terms are usually incredibly unfavorable to the consumer, with enormous up-front costs and high interest rates that sometimes can exceed 40% or more. Home equity loans and lines typically have much lower interest rates than traditional types of financing, such as credit cards and personal loans. These loans are granted on fixed interest rates against the borrowers' house as security. Home loans offer a fixed interest rate with fixed monthly payments, while home equity lines of credit feature a variable rate so monthly payments can increase or decrease as rates and your principal balance change. Interest rates are usually fixed rather than variable.

So, you should always remember that home equity loans are not for everyone. Make sure that you have a good plan in mind when you go for a home equity loan. Get information about different home equity loan lenders . Compare their advantages and disadvantages and then decide which loan plan and which lender is best suited to your needs . You can use online mortgage lenders to get several quotes for free.

By: Sandeep Singla

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California Home Loans

Some people in California do not really know how to start with their California home loans. From San Francisco to San Diego, Sacramento, San Jose, Los Angeles or any small and big cities in California, you need to know what type of California home loans you are trying to get. Home loans like mortgage refinancing, fixed rate mortgage loan or an adjustable rate mortgage. Some are for first time homebuyers or even debt consolidations through the use of your equity.

The question now is where do you use or make use of California home loans? People who have adjustable rate mortgage would like to know especially with the current financial crisis and bail outs being handed over by the government if their payments are going to reduce. With all the news of cash bail outs and infusion of money into the financial sector, one would expect some relief especially for people with adjustable rate mortgage. And some lenders are having very stringent guidelines in lending money now. But still some are giving some qualified people a lot of lower rates as the government is helping the hardest hit states in the subprime collapse.

And still more people looking for the states mortgage loans are actually looking to refinance their current mortgage loans. A home loan in California comes in many different forms and types so it depends on your circumstances where you need the loan. Some would refinance just so they can consolidate their debts and loans.

Mortgage refinancing can have many advantages. You can use it for your much needed renovations through cash out. Or you can use it to lower your monthly payments or lower interest rate payments. You will also be able to use for some major purchases and projects. And most of the practices in the state of California are that you are better off if you stay with your current lender.

For first time home buyers in California, it will not be hard thing to do because buying a house in this state is very similar to other states. To find the lowest and cheapest mortgage loan, you need to go online and search for state home loans on the internet. Doing it this way is a lot easier than getting an appointment to see a mortgage specialist at bank or the lenders office. There are ways of doing this and one of them is through telephone call, getting appointment and going online and uses a mortgage calculator to calculate a mortgage so will know if you are qualified or what is the range you can get a California home loans.

For fixed rate mortgages here in this state, it is not much different from any other states. Fixed rate mortgage loans are always fixed and they are index from different indices that the lenders and banks use. So even with the government help to the hardest hit states, a fixed rate borrowing will not changed much. Whichever county of the state, if you have a fixed mortgage loan you are going get any break with the changes n the prime lending and changes in the fed interest rate. Regardless of the types of California home loans you are trying to get, just make sure you are getting it form a highly rank and reliable financial institution or lender. And doing your inquiries online will help you tremendously and do it with ease. Forget the old traditionally way of doing things, you will spend more time and just for a simple inquiry if you have to go your local branch.

by JulieV

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What to check before buying homes.

This period who are looking to purchase a new house. Try to read the tips should be checked before buying a home to have the information in the decision to buy home.

1.Limit lending by financial institutions.

Buyer will provide credit monitoring of financial institutions.Or by providing sites for housing.Or the financial institution's website. Typically financial institutions lending to approximately 25-30 times the rate of salary recovery. In case the buyer together with a recovery ratio of the credit line increase. Will increase the salary rates of recovery. Financial institutions may consider lending more than the minimum amount required. Based on other factors such as occupation of the advanced security capabilities to pay by installments.

2.Resources to purchase homes.

You have to divide that information such as pricing or the type of housing. The information will be available from the print media or information site in the residential So you can save time and costs. Before you can see the actual location of the home you want to buy.

3.Source of public information.

You must know the official data. Related area home you will buy. If in the future may be to restore the area from the government agencies. You should know the source of infrastructure near the home you buy.

4.City plan of the house you buy.

Buying your home should avoid sources of near industrial areas or commercial or more dense housing. Because the cause pollution and traffic problems.

5.Facilities necessary

You should buy a home near schools hospitals shopping malls. Etc. because it is necessary to place your family.

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Understanding a California Home Equity Line of Credit

For many people living in California a home equity line of credit, or HELOC, can help them through financially trying times. These are open ended or revolving loans that allow you to advance yourself money up to a pre-approved credit limit. In this fashion they work much like a credit card.

The difference is the interest rate is normally set at a low rate and the payment options are flexible during the initial draw period. For instance if the draw period is ten years that's how long the line of credit is open for. As long as you are under the limit you can draw against it. In most instances at the end of the draw period the balance needs to be paid in full.

As you take out advances during the draw period you will start to make monthly payments, most of which will go towards paying back the interest. There are some lines of credit that will allow you to make interest only payments. You do have to be careful when paying only interest because many home equity lines of credit will have balloon payments as the draw period nears an end. The more you owe on that credit line the bigger these payments will be.

In a worst case the entire amount owed will need to be paid back in one lump sum. This is why it is important to understand all the terms before you sign the closing papers. In many cases there will be an option to pay back the loan over a fixed period of time after the draw period has ended, but you need to make sure this is the case before the bank is asking for payment in full.

In some cases the interest may be adjustable and is tied to the Prime Lending Rate, which is the rate the major banks charge their most credit worthy customers. There is usually a limit as to how high this interest rate can go. When the interest adjusts depends on the terms offered and is something you need to be aware of. Interest paid on a home equity line of credit is normally tax deductible.

If you are California resident you will have an option of deciding if you want outside or affiliate companies accessing your private financial records. Your lender can only disclose financial information because of the California Financial Information Privacy Act to companies who have a vested interest in securing the loan. If you are thinking about applying for a home equity line of credit it is important to keep all this in mind.

by Andrew Bicknell

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Home Equity Refinancing and Home Equity Loans

What are home equity loans, home equity lines of credit, and home equity all about and what is the deal with home equity refinance? The following article will help you answer all of these questions.

For starters, equity is the difference between the money owed on your property and how much your property is worth. For instance, if $130,000 is the price you can sell your home for and you owe $40,000 against its mortgage, $90,000 is the total amount of equity the property has accrued.

A home equity loan is simply a loan taken out based on this $90,000 figure. This loan is a one time lump sum paid off over a couple of months, similar to a mortgage.

A home equity line of credit can be compared to how credit cards work. With this type of credit, you borrow a dollar amount, use it, and pay back your creditor just like that AMEX card in your wallet. For instance, let's say your line of credit is $5000. $1000 goes towards a down payment on a car, and then monthly payments are made on that $1000. Although monthly payments are going directly towards that $1000, another $500 can be borrowed against your $5000 line of credit which would allow you to keep making payments on the final amount that you borrowed from the $5000.

When you file an application for this type of loan, your home is used as collateral. This means your house would be given up in case of defaulted payments. If your debt is not repaid, the lender can take away your asset legally which means your home, which is used to sell to recover the remainder of the debt.

A home equity refinance is also recommended in some cases. If your original home equity loan was doused with an outrageous interest rate, refinancing the loan allows you to save money every month. If monthly payments are becoming harder by the day, refinancing can change that. All it takes is an inquiry with your lender along with an explanation that will blaze the path towards a new home equity loan.

by Charley Hwang

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Why choose Home Equity Loan?

Home equity loan can be a difficult concept for the people who have never dealt with home ownership earlier. So, we define equity as the financial value of a property or business beyond any amounts payable on mortgages, liens, claims, etc. In short, home equity is how many houses the person has earned.

Equity is basically the difference between the market value of a property and the claims held against it. It is the difference between the price for which a property could be sold and the total debts registered against it. For example, if your house is worth $150,000 and you owe $110,000 then your equity is $ 40,000. Then, you get home equity loan depending on the credit and many other factors for $40,000 that you have built up in equity.

There are two types of Home Equity Loan:

Standard Home Equity Loan

Home Equity Line of Credit

Standard Home Equity Loan is the loan that is assured by your home or is secured by the equity in a home. This type is a better option if you need a large amount of loan and for long term. Standard home equity loan is also known as Second Mortgage or equity loan. Home equity loan can help people pay off their big interest rates, non tax-deductible customer's debt or meet some other short term needs.

A standard home equity loan is a closed-end loan that can have a fixed term, a fixed rate, and fixed monthly payments. It can carry a variable finance charge rate that switches with a federal interest rate. The amount of the loan is usually made available in a lump sum.

Home Equity Line of Credit is a loan option if you need a smaller amount of loan and for short term. This loan type provides you an option of withdrawing money from an equity account when you need it. The home equity line of credit is an "on demand" source of funds that a borrower can access and pay back as needed.

This type of loan has fluctuating rate of interest. The borrower has to only pay the interest if he carries a balance because this line of credit are essentially a revolving line of credit, like a credit card but with a much lower rate because the line of credit is secured by your home. The borrower can tap the credit line simply by writing a check, and pay back the loan as quickly or as slowly as the borrower like, as long as he meets the minimum payment each month.

Benefits of Home Equity Loan are:

Home Equity loan can be the best option if you need to repair or reconstruct your home for debt consolidation or for medical or educational expenses.

It can be used to get rid of credit card debts.

It can be used to meet your educational loans.

It can be used for investment in other real estate.

It can be used to pay off your medical debt.

It can be used to refinance your other debt.

It can be used for home improvement.

It can be used for some major purchases and expenses.

It can be used for debt consolidation.

Home Equity Loan can be used for home improvement projects because home improvement can be costly and paying that cost might be difficult. Home equity loan provides good interest rates.

Studying in a college has become very expensive these days. Home equity loan can also be used for paying college expenses. This type of loan helps people who have financial problems so that they can afford the college expenses.

It does not matter what is your decision but whenever you take a home equity loan it should be taken from a trusted and well re puted lender. As a whole, home equity loan is a better option while taking loan because it is beneficial in all aspects.

by Prerna Joneja

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Why Home Equity Loans are popular

Home Equity Loan - An extremely popular and efficient way to borrow is using the roof over one's head as collateral for sizable amounts of credit. To define a few terms, equity is the difference between your home's appraised - or fair market - value and your outstanding mortgage balance. A loan refers to the amount of money you borrowed from a lender providing you with the mortgage. So basically, the idea with home equity loans is to borrow against your home's equity as a very effective way to get some things you need at a good price.

Why Home Equity Loans are popular

To be sure, borrowing against the value of a home has become increasingly popular. Why, you ask. There are two key reasons for this surge: low interest rates and tax deductibility.

The tax changes that occurred in 1986 have eliminated deductions for most consumer purchases. As a way to get around these changes in tax, consumers began borrowing up on their home value in order to make purchases. Home equity loans thus became a method adopted by homeowners to buy goods and still get a deduction.

For instance, let's say that you bought your home for $95,000 and made a 20 percent down payment of $19,000. To pay the remaining $76,000, you then took a first mortgage. On the day you closed on your home, you automatically had 20 percent equity. As you pay off the principal, you gain equity and your home grows in value.

Now, let's say that you have paid $12,000 toward the principal and your property. Remember that you property was valued at $95,000 when you bought it. Now, since you have made the payment on your principal, your $95,000-home is now worth $115,000. Your beginning equity ($19,000), plus the principal you have paid ($12,000) and the increase in your property value ($20,000) gives you $51,000 in equity.

Home Equity Loans: Equity as a Valuable Asset

Banks and borrowers both benefit from home equity loans. The reason for this is that equity is a valuable asset to have. You can put it to use without having to sell your home. And because most people's domicile is their biggest asset, lenders regard home equity loans as secure. For that reason, interest rates for home equity loans are lower than for other loans.

Who are the best borrowers of Home Equity Loans?

Earlier in the article, we have made mention that home equity loans are beneficial to both the lender and the borrower. However, like all things, home equity loans also have their downsides. The disadvantage to home equity loans is that if you default on the loan, the lender could foreclose on your home. For this reason, home equity loans are statistically most suited to stable, middle-aged borrowers.

by Tony Forster

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Home Equity Loan Repayment Tips

A Home Equity Loan can be structured in a number of different ways to fit your particular financial needs. With most home equity lenders offering home loans with variable percentage rates, low or no closing costs, and a variable repayment length, it's no wonder that many homeowners in need of money seek out home equity loans as a source of cash. However, the main thing to keep in mind is that your home is the collateral for this loan, so repaying the debt is of the utmost importance.

Although a home equity loan is a powerful financial cash source that allows you to borrow against a percentage of your home's value for just about anything that you need cash for including home improvements, debt consolidation, a new car purchase, funding an education or maybe even financing a wedding, before you sign, you should know the important guidelines for repaying the mortgage debt and avoid becoming overextended, and in greater debt.

Home Equity Loan Repayment Tips

The first home equity loan repayment tips is to borrow wisely. Just because you qualify to borrow up to 85% or more of the value of your home does not mean that you should. Really, you should only borrow what you need and can afford to pay back without being in a bind to do so. Setting limits, budgeting, and being conservatively safe with money is always good advice, and when your borrowing period ends, it's wise not to try to extend it under any circumstances.

Secondly, examine the interest rate that you'll be getting. Ask your mortgage lender to provide a comprehensive explanation of the terms of interest. Find out what the interest cap will be, if and when the rate will become variable, and if the initial rate is merely an introductory offer. Many borrowers get lulled into a false sense of security because they have been offered a great 'introductory' rate, without fully understanding the amount of interest they'll actually be paying once the 'real' interest kicks in on the home equity loan. These small details will always make a big difference.

Third, make sure that you know the repayment terms of your home equity loan. If you have a variable term home loan, chances are that your payments can and will change over time. You should receive an amortization schedule with your loan documents that will explain the terms.

Other home equity loan repayment tips include, being sure to find out if you have to make a balloon payment on your home equity loan or line of credit as you near the end of your payment schedule. A balloon payment is a large lump sum due on the final payment, and some homeowners are caught off-guard and scramble to gather the large lump sum, as they have been accustomed to making much smaller payments until then.

Another word of advice is to familiarize yourself with the 3 Day Cancellation Rule. By law, you always have a three day period after you sign the loan in which you can cancel, and if you're unsure about any portion of the deal, be sure to let your lender know in writing for a full refund of any closing costs involved.

Although we've tried to provide helpful tips to aid you in your home equity loan process, this information is merely designed to give you an idea of things to look for and should not be considered legal or financial advice. Make sure that you check with any potential mortgage lenders for their specific home equity loan details before you borrow.

by Bob Darron

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Home Refinance - Things You Need to Know

Home refinance loan - an introduction

In simple terms, home refinance or home loan refinance means a special type of loan that adds on to the principal balance owed, usually for property or home improvements, and alters the existing payment amount and terms. If you're paying a high interest rate for your current mortgage, or if you're stuck in an adjustable rate mortgage, or if you require cash liquidity, or if you plan to consolidate your debt, it's advisable to avail mortgage refinancing facilities. Mortgage refinancing helps you to redeem the remainder of your existing home loan or mortgage loan by taking on a new loan with better terms and conditions. There are many mortgage refinancing options available to you.

When to refinance

If you're currently paying for an adjustable rate mortgage, you might want to think about going in for a fixed-rate mortgage. At times it makes sense to refinance. However, the exact time to refinance depends greatly upon your individual situation and what your financial goals are. It's important to ask yourself some questions before refinancing:

How long do you plan to occupy your home?

How much equity have you invested in your home?

Are you willing to compromise for a lower interest rate?

Are availing lowered payments worthwhile as compared to the cost incurred for the mortgage closing costs and the initiation fees?

Refinancing from an adjustable rate to a fixed rate

It's advisable to get the lowest possible fixed rate for refinancing your home or mortgage, but you also have to consider your existing financial situation. If currently you're in the first year of an adjustable rate mortgage (ARM), and you plan to move on after three years or so, it's not advisable for you to refinance.

Whether to "lock in" an interest rate

It's not possible to predict what the future interest rates will be. But statistically, when mortgage rates rise faster, eventually they do lower down and become steady. Therefore, if you're thinking about availing a home loan or a mortgage loan, you could lock in your rate now. You can always "refinance" later on if the mortgage rates drop in the future. The possible drop in the future interest rates may not be drastic enough to affect your monthly mortgage payment. However, every situation is different, so it's important to consider and analyze all your options before deciding in a conclusive manner.

The difference between the estimated value of your home and what your house is actually worth

A home's "estimated value" is generally determined by either an appraisal or a comparative market analysis, while its actual "worth" is eventually established by what the prospective buyers are in fact willing to pay for it. The "sale" price that you can obtain by actually selling your existing home is the practical "price" generally considered by banks and lending institutions.

Planning For The Future

Our professional will assist your income better, by make certain that you will meet the necessities of your home refinance loan which would be based on your specific situation regarding your difficulty. Refinanceitt offers you the finest solution by our professionals according to your state affairs. Our service is free of charge, off the record as well as comes through no compulsion.

by Diane Anderson

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