Home Equity Loans Defined

Home equity loans are a popular way for homeowners to borrow money using the equity in their home as collateral. With this type of loan you can use the equity in your home to finance a multitude of things, from home improvements to large purchases and more. If youre considering a home equity loan you should gather information from several lenders to find the loan program that is the best fit for you.

What Is A Home Equity Loan?

A home equity loan is separate from your primary mortgage. It is an additional loan that provides you with a loan amount based on the equity you have built up in your home. Its usually easier to qualify for this type of loan than for a regular mortgage and the entire transaction can proceed very quickly from start to finish.

How Do I Know How Much I Can Borrow?

The amount of equity in your home is equal to the value of the home minus your outstanding mortgage debt. Most lenders will allow you to borrow some or all of this equity, depending on your personal circumstances. Some even offer special programs that will lend up to 125% of the total value of your home.

What Can I Do With The Money I Borrow?

Your home equity loan can be used for just about any purpose. Some of the more popular uses include buying a car, paying for a childs college education, and doing home improvements. The wise borrower who secures a home equity loan will be careful to ensure the additional debt is manageable within their overall financial situation. This is important because if you fall behind or default on a home equity loan you will put your home at risk.

Advantages And Disadvantages Of A Home Equity Loan

As with any loan, there are advantages and disadvantages to taking out a home equity loan. It is a relatively easy and low cost way to pay for a major purchase or home improvement project, and the loan interest may be tax deductible in some cases. Because a home equity loan is fairly easy to get, though, it also can be tempting to over-borrow and over-spend on things that may be considered luxuries. Remember, you are borrowing against your home so be sure you use the money wisely.

How Do I Find A Home Equity Loan?

You have many choices when it comes to finding home equity loans. There is no shortage of lenders who would like your business so its important to shop around to make sure you find a deal thats right for you. A good place to start is with the lender who holds your primary mortgage, as they are likely to offered special rates and terms for existing customers. Also, your current lender will probably be able to process the loan more quickly since they already have records of your repayment history.

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Mortgage Refinance Calculator - A Helpful Financial Tool

There are plenty of factors that you need to look into in order to make an informed decision regarding refinancing. This is where you will find a mortgage refinance calculator quite handy. This is an ultimate online financial tool that allows you to calculate the various aspects associated with the refinancing of your existing mortgage. For example, by using this calculator, you can easily determine the amount of interest that you would have to pay throughout the course of loan, the total cost of loan, and may other such related things.

How Much Does It Cost?

You will be glad to know that the mortgage refinance calculator is available for free on various websites. You would not have to spend even a single penny in order to use this financial tool. Every lender and broker offers this facility on their official website. You should note that just because you are using the calculator from the website of a lender of broker, it does not make you liable to sign up with them. You can also access such calculators on several informative websites. There are many websites that offer extensive information regarding the latest trends in the mortgage market. Browsing through such websites will make you aware of the latest trends and you will be able to make an informed decision. What is more, these websites also provide you with the facility to calculate the loan cost through a free online calculator.

How To Use?

A mortgage refinance calculator is very easy to use. The calculator is, in fact, a simple web page, where all you have to do is just the filling out of a small form. For example, if you want to calculate the right repayment period, you have to fill in the rate of interest that you are willing to pay, your current monthly income, and the amount of loan you want to borrow. Clicking on the submit button will open a new page on the same window, where you can see the right repayment period that can accommodate your specific needs based on the information that you had provided.

Advanced users can also use the mortgage refinance calculator to compare the different refinancing offers by several lenders. You can use the calculator to find the overall cost of loan based on the rate, repayment period, closing cost, and the total amount that you are being offered. This will make the task much easier for you to choose the right type of loan offer that is best suitable for your specific needs. Always remember, just because a lender is offering you the lowest rate, it does not mean that the loan offer made by them is the best.

When it comes to making an informed decision regarding refinance, a mortgage refinance calculator can be very handy for you. It will help you make your calculations easily and make the right decision. For more information best mortgage refinance rate, please visit mortgage refinance loan

Home Equity Loan Approval Is Swift

Quick home equity loans are easy to get and qualify for. Whether you are looking to remodel your home, pay off high-interest credit card debt, go on that dream vacation, or send your children to college, a quick home equity loan or line of credit may be the perfect solution.

Dont Rush In

Before you run out and sign the first offer that comes to you, here are some things to consider so that you can make sure you get a home equity loan right for your needs. Simply stated, home equity financing uses the equity you have in your home (home value minus what's owed) to secure a loan. Because of this added security, lenders typically offer better interest rates than when compared to unsecured loans, auto loans, or other loans backed by collateral that might depreciate over time.

With most quick home equity loans, you'll be able to borrow an amount equal to 80% of your equity. For example, if your home is worth $200,000 and you still owe $160,000 then you could probably borrow up to $32,000 (80% of $40,000). Different than mortgage lending, home equity financing can actually take the form of two different kinds of financing, a loan or a line of credit.

A Home Equity Loan

A home equity loan, which is also known as a second mortgage, is no different than any other type of personal loan. It's simply a fixed amount of money that must be repaid over time in accordance with the terms. In almost all cases, a home equity lender will advance the full amount of your borrowing limit to you once you are approved. Then, you agree to pay a set amount each month that is based on the principal and interest, until the loan is repaid in full.

A Home Equity Line of Credit

In this scenario, you're approved for a revolving credit line up to a certain limit as decided by the lender. This means that you can borrow and then repay only what you need and only when you need it. Whether you write a check, use a "debit card" or request a bank transfer of available funds, you're allowed to obtain money during the open borrowing period. The interest rate generally varies depending on when you borrow the funds and your monthly payments will depend on the charges still outstanding on your line of credit.

A big benefit of home equity loans is that you may be able to deduct the interest paid on loans up to $100,000 if married and filing joint, or $50,000 if married and filing separately. Regardless of how you use the home equity loan or line of credit, the interest you pay is generally tax deductible. This simply means that you don't have to use the home equity proceeds for capital improvements.

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Sarah Dinkins is an Expert Loan Consultant in the financial industry that helps people to repair their credit and get approved for home loans, unsecured personal loans, student loans, car loans and other types of loans and financial products. At her Website she is continually adding new finance articles useful for those in need of professional advice.