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Home Equity Loan Or Home Equity Line Of Credit ? Which Is Right For You?
The most common type of home equity loan is the term loan. This loan is set for a fixed amount of time, anywhere from five to fifteen years. Such loans are typically granted for up to 80% of the value of the home, but some lenders will lend up to 125% of the home's value.
Is this type of loan right for you? The term loan works best for those who need to borrow a fixed amount of money for a specific purpose ? paying for a wedding, a home remodeling project, a fixed educational expense, or debt consolidation. This would give the borrower a fixed repayment schedule, where he or she would pay a set amount of money each month for a specific period of time.
An increasingly popular alternative to the home equity loan is a line of credit. This type of loan works like a credit card, and has a revolving line of credit, in which the borrower may borrow against the principal more than once over the life of the loan. The borrower is usually given special checks that he or she may use to write checks against the loan amount. The borrower may borrow a little at a time, or borrow all of the loan amount at once. Unlike the term loan, the interest rate on lines of credit tends to be variable. This type of loan works best for recurring expenses ? a complicated remodeling project accomplished in several stages, or a recurring educational expense such as annual tuition.
Each type of loan has its advantages and disadvantages; you simply need to decide if you want a fixed interest rate and fixed payments, or more flexibility in terms of when and how you pay. Your needs will determine which type of loan is best for you.
Either way, under current Federal law, the interest on a second mortgage is deductible from your income taxes up to $100,000. ©Copyright 2005 by Retro Marketing. Charles Essmeier is the owner of Retro Marketing, a firm devoted to informational Websites, including http://www.End-Your-Debt.com/ and http://www.HomeEquityHelp.net/
Avoiding Foreclosure Scams
If your mortgage company is threatening foreclosure, there are things you can do to avoid it (see my article titled "How to Avoid Foreclosure"). However, you should be aware of scams. If there are solutions to your problems that seem too good to be true, they probably are.For example, if you're trying to sell your home yourself without professional guidance, beware of buyers trying to rush you through the process. It is unfortunate, but there are people who will try to take advantage of your financial difficulty. You should be especially alert to these scams:Equity Skimming.In this scam, a person approaches you as a buyer, offering to get you out of financial trouble by promising to pay off your mortgage or to give you a sum of money when the ...
2nd Mortgage - Better Than Refinancing
You have probably received refinancing offers in the mail or advertised online touting your ability to pull out your home's equity. But a 2nd mortgage, also called an equity loan, may be a better financing option than refinancing your mortgage. 2nd mortgages are ideal when you just want to tap into your equity, plan to move soon, or are unsure about the amount you want to borrow.Tapping Your EquityTapping into your home's equity is best done through a 2nd mortgage if you already have a low interest loan. Typically, applying for a 2nd mortgage requires fewer fees than refinancing a mortgage. 2nd mortgages are also paid back sooner, so your interest payments are less.
Good Fico Credit Score? Tips To Getting The Most Out Of Your Home Mortgage Loan With Good Credit
Sometimes so much is talked about how to solve the problem of having bad credit, but what about when you have an excellent credit rating? Good credit is considered to be a credit score of 650 or higher. How can you ge...
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Home Loan Confusion Continues
Unfortunately, most Americans still do not understand how home loans work and how to take advantage of the wide array of programs available. The way I see it, people are still confused about mortgages in general and real estate finance, in particular.Just last week, a friend of mine told me he was buying a house. He was pre-approved for a loan, he said, and I was very happy for h... |  |
| Key An Eye On Your Mortgage Payments
In previous decades, when a borrower missed a payment on a mortgage, the lender would often consider them one month behind until they eventually caught up. Most lenders would impose a late fee and other interest or penalties, tacking them onto the back end of the loan as long as the lender stayed current with the rest of their payments.With the number of bankruptcy filings creeping higher each year, and with increasing pressure on lenders to return dividends to shareholders, mortgage companies have quietly resorted to creative accounting practices to put pressure on slow payers.Under new rules, a mortgage lender can ding your credit report every month that you are behind on a payment. In addition, they can impose penalt... | |
| Financing A Home With Bad Credit
Financing a home with bad credit is a common problem for people. Over 25% of homes in the US are financed through sub prime lenders, who offer financing to high-risk borrowers. While sub prime lenders charge higher rates and fees, through comparison shopping you can find a competitive financing offer.Chec... | |
| Home Equity Loan Considerations
In other words, the benefit of the loan must outlast the loan period. Taking a loan for financing that elusive vacation is a strict no-no. Moreover, home equity loans must also never be taken for day-to-day expenditures. This option should be saved for emergency needs only.When applying for a home loan, all credentials of the lender must be keenly checked. The local consumer protection agency could be contacted for providing a list of lenders with an honest repute. All fine print must be carefully scrutinized, and one must avoid signing documents without having read them or ... | |
| How To Secure The Best Mortgage Deal And Save Yourself Thousands In Interest
When you consider that the average home owner will pay out far more in interest over the lifetime of their mortgage than their home actually cost in the first place, you can see why working to secure yourself the best possible mortgage deal now could save you tens of thousands of dollars in interest over the 25 ? 30 year lifetime of your home loan.For the majority of us our house is the single most important and expensive purchase we ever make! Because this is the case we invest a lot of time and effort into finding the perfect property in the most ideal location, however few of us invest ... | |
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