Home equity loan allows you to borrow money using your home’s equity as collateral. Collateral as you know is the security against which you take the loan amount. But in case of home equity loan the collateral provided is the equity in your home. Now coming down to explain equity which is the difference between how much the home is worth and how much you owe on mortgage. And now home equity loan is a second mortgage that helps you to turn equity into cash. The cash of home equity loan ranges from £5000 to £100,000 with a term of 3 to 25.
Home equity loan is beneficial as the rate charged is tax deductible. Home equity loan can be used for various purposes like—
Debt consolidation
Home repairs
Medical bills
College tuition for family members
Purchase of vehicle
Wedding expenses
Trip to exotic places
Poor credit homeowners who are with CCJs, bankruptcy, arrears, late payments etc are also benefited with home equity loan. This gives the borrower another chance to repay the loan amount in the scheduled term to prove his credibility in the loan market.
Internet being a close friend of man these days helps him to reach a suitable lender with no wastage of time. Online home equity loan helps the borrower get free quotes which help him to compare different lenders in market and settle at getting a better deal.
Home equity loan is provided to each individual with whatever circumstance he has like self employed, retired, have poor credit etc. This makes home equity loan simple, fast and straight forward.
Peter Taylor is a senior financial analyst at Best Tenant Loans UK with an acumen for finance and insurance. In recent years he has taken up to provide independent financial advice through his informative articles. His articles are widely read because of the lucid manner of writing and thoroughly researched data. To find Online secured loans UK, Bad Credit Loans, Home equity loan, No Equity Loans, Debt Consolidation Loans, Fast Loans that best suits your need visit http://www.besttenantloansuk.co.uk
Article Source: http://EzineArticles.com/?expert=Peter_Taylor
Sunday 22 March 2009
Home Equity Loan - Searching For a Bargain
Fix your credit score
One of the best ways to lock in a bargain in your home equity loan is to fix your credit score. Generally, the higher your credit score, the better terms you will be able to obtain on your loan. Conversely, if you have no credit or poor credit, the loan terms are likely to be less desirable and to cost significantly more over the term of the loan. Improve the credit score by making sure the entries that appear are correct. Inaccurate entries can lower your score by many points and actually make the difference between able to qualify for the loan or not.
Negotiate your loan terms
Making certain that the loan terms for your prospective home equity loan contains only terms that you understand and are in agreement with is vitally important to the ability to repay your loan. You should never allow yourself to be placed in the risky situation of an unplanned financial attack because of misunderstood or unfavorable loan terms. Review each component and refuse to sign anything you don't understand or that you are uncomfortable with.You can sometimes get hundreds of dollars removed from the proposed loan just be asking about expensive factors.
Pay ahead
One of the easiest ways to get a bargain on your home equity loan is to make a single payment on the principal early in the repayment process. You will find that even a few dollars applied to the principal early in the loan term will save hundreds or even thousands of dollars in interest. An even faster way to pay off any mortgage loan is to add a few dollars with each payment made to apply to the principal. This can make a significant difference in the amount of interest you will pay in total. It can also cut your repayment terms by months or even years.
Borrow less
This suggestion may seem self defeating, since hopefully you won't borrow money you don't need, but in essence, if you include loan fees and brokers fees in the principal of the loan and pay interest over the loan term, you will be paying significantly more money over all. Instead of amortizing all the fees, try to pay at least part of the costs for your home equity loan immediately in order to avoid paying interest on the loan fees. If you cannot pay all the fees up front, at least make a first monthly payment on the loan immediately so that you will save some interest costs.
Timing is everything
Being aware of the timing of both the placement and payment on your home equity loan is a great way to obtain a bargain in the costs of the loan. By making an early payment or two once the loan is obtained, you save money in interest. But, you should be aware of interest rates when structuring your original loan so that you don't pay more in interest rates than is appropriate for the economic climate at the time of the loan.
When you are searching for home equity loan information on the internet, go to the best site for a variety of tips, hints and links. You can find all this and more at Home Equity Loan or Home Equity
Article Source: http://EzineArticles.com/?expert=Alan_Lim
One of the best ways to lock in a bargain in your home equity loan is to fix your credit score. Generally, the higher your credit score, the better terms you will be able to obtain on your loan. Conversely, if you have no credit or poor credit, the loan terms are likely to be less desirable and to cost significantly more over the term of the loan. Improve the credit score by making sure the entries that appear are correct. Inaccurate entries can lower your score by many points and actually make the difference between able to qualify for the loan or not.
Negotiate your loan terms
Making certain that the loan terms for your prospective home equity loan contains only terms that you understand and are in agreement with is vitally important to the ability to repay your loan. You should never allow yourself to be placed in the risky situation of an unplanned financial attack because of misunderstood or unfavorable loan terms. Review each component and refuse to sign anything you don't understand or that you are uncomfortable with.You can sometimes get hundreds of dollars removed from the proposed loan just be asking about expensive factors.
Pay ahead
One of the easiest ways to get a bargain on your home equity loan is to make a single payment on the principal early in the repayment process. You will find that even a few dollars applied to the principal early in the loan term will save hundreds or even thousands of dollars in interest. An even faster way to pay off any mortgage loan is to add a few dollars with each payment made to apply to the principal. This can make a significant difference in the amount of interest you will pay in total. It can also cut your repayment terms by months or even years.
Borrow less
This suggestion may seem self defeating, since hopefully you won't borrow money you don't need, but in essence, if you include loan fees and brokers fees in the principal of the loan and pay interest over the loan term, you will be paying significantly more money over all. Instead of amortizing all the fees, try to pay at least part of the costs for your home equity loan immediately in order to avoid paying interest on the loan fees. If you cannot pay all the fees up front, at least make a first monthly payment on the loan immediately so that you will save some interest costs.
Timing is everything
Being aware of the timing of both the placement and payment on your home equity loan is a great way to obtain a bargain in the costs of the loan. By making an early payment or two once the loan is obtained, you save money in interest. But, you should be aware of interest rates when structuring your original loan so that you don't pay more in interest rates than is appropriate for the economic climate at the time of the loan.
When you are searching for home equity loan information on the internet, go to the best site for a variety of tips, hints and links. You can find all this and more at Home Equity Loan or Home Equity
Article Source: http://EzineArticles.com/?expert=Alan_Lim
How To Pick The Right Home Equity Loan Product For You
Home equity loans have a variety of options to help fit your budget needs. So you can find closed, fixed rate home equity loans or a flexible line of credit with adjustable rates. Rates and fees vary according to the loan product you select. So make sure that you pick the right credit for your situation.
1. Know The Cost Of Credit
Before you select a home equity loan, understand the costs involved. You can easily find information on lender sites. They will post general rates, along with information on fees and payment schedule.
In general, closed home equity loans, also called second mortgages, have fixed rates with their set payment schedule. Closing costs are moderate, but you have protection for rising rates.
A line of credit has higher rates, but few, if any application fees. For the first five years or so, you just make interest payments on the amount you have used.
The other option is to refinance your first mortgage while cashing out your equity. If you were already planning to refinance, this can qualify you for a lower rate and save you money on closing costs.
2. Identify Your Purchase Goals
The type of purchases you plan to make with your home equity loan will also help you determine which is the best home equity loan for you. For large fixed purchases, like a remodel, a closed home equity loan works best. Lines of credit works better for small purchase over time or as a source for emergency cash.
3. Plan For Repayment
Home equity loans also have different payment plans. Closed loans require you to pay both interest and principal payments. Lines of credit only expect interest payments, at least for the first few years. After that your loan can be refinanced into a closed loan or be required to make additional principal payments.
The length of your loan should also be taken into consideration. With the closing costs of closed loans and cash out refi, you will need to keep the loan for several years to recoup the costs, even with their lower rates. But if you are planning to move soon, a home equity line of credit could be a cheaper source of credit.
See our resources for more information on a Second Mortgage and Home Equity Loan or for a House Mortgage Refinance
Article Source: http://EzineArticles.com/?expert=Carrie_Reeder
1. Know The Cost Of Credit
Before you select a home equity loan, understand the costs involved. You can easily find information on lender sites. They will post general rates, along with information on fees and payment schedule.
In general, closed home equity loans, also called second mortgages, have fixed rates with their set payment schedule. Closing costs are moderate, but you have protection for rising rates.
A line of credit has higher rates, but few, if any application fees. For the first five years or so, you just make interest payments on the amount you have used.
The other option is to refinance your first mortgage while cashing out your equity. If you were already planning to refinance, this can qualify you for a lower rate and save you money on closing costs.
2. Identify Your Purchase Goals
The type of purchases you plan to make with your home equity loan will also help you determine which is the best home equity loan for you. For large fixed purchases, like a remodel, a closed home equity loan works best. Lines of credit works better for small purchase over time or as a source for emergency cash.
3. Plan For Repayment
Home equity loans also have different payment plans. Closed loans require you to pay both interest and principal payments. Lines of credit only expect interest payments, at least for the first few years. After that your loan can be refinanced into a closed loan or be required to make additional principal payments.
The length of your loan should also be taken into consideration. With the closing costs of closed loans and cash out refi, you will need to keep the loan for several years to recoup the costs, even with their lower rates. But if you are planning to move soon, a home equity line of credit could be a cheaper source of credit.
See our resources for more information on a Second Mortgage and Home Equity Loan or for a House Mortgage Refinance
Article Source: http://EzineArticles.com/?expert=Carrie_Reeder
Home Equity Loan Refinancing
If you have lived in your home for more than two years, it has probably appreciated which means that you have built up equity. What is home equity? Home equity is the difference between the value of your home and the amount of all that you owe on your home. If your home has an appraised value of $200,000 and all of the outstanding liens against it total $150,000 then your home equity equals $50,000. Often times when a home has accumulated value, the homeowner decides to take some of that value out in cash. Sometimes the cash is used to pay off bills, for home improvements or for a child’s education. One of the best ways to tap the money available from your property is to refinance it with a home equity loan.
When considering a home equity loan, there are several steps you should take to ensure you choose the refinancing package that is right for you.
· The current market for home equity loan refinancing is crowded and very competitive. As a homeowner you probably receive solicitations for loans almost daily via the telephone or the mail or the Internet. Be wary of accepting any of these solicitations without thoroughly investigating them. The best course of action might be to initiate your own independent search for a financial institution or mortgage broker. Also be aware of the fact that a mortgage broker in any loan situation is not automatically working to get you the best deal. You are the person who should take responsibility for making sure that the final loan product is the one you need. The Better Business Bureau, the yellow pages, the Internet and references from friends are all good places to start your search for refinancing your loan.
· You will need a certified appraisal for the actual loan. However, it is wise to have an idea of the value of your home before you begin the process of refinancing. There are many online services that will give you an estimate of your home’s value. Many times home sales are listed in the newspaper. Watch these listings for homes in your neighborhood that are similar to yours in size and condition. Note their prices.
· Know your credit score. By law you are allowed one free credit report a year. The credit reporting agencies that supply the report generally will also offer your FICO score for a small additional fee. There are other factors that influence your ability to obtain a home equity loan but your credit report and FICO score are good places to start.
· Once you have identified several possible sources for refinancing your loan, have the lenders explain the different loan products they offer. Don’t be afraid to ask specific questions and don’t be hypnotized by a low interest rate. A low interest rate alone is not sufficient reason to accept a loan proposal. Ask about the term of the loan and the closing costs. Make sure the lender explains any terms you may not fully understand such as points.
· Let the lenders know they are competing for your refinancing business. Sometimes a lender will sweeten your deal if there is the possibility the it might be lost otherwise.
· Have all proposals submitted in writing. Take the time to compare them and always make sure you are comparing the same types of things. For instance, don’t just look at the bottom line number on the closing costs see what each lender is including in the closing costs.
· Be alert to potential scams. Don’t be intimidated by your refinancing lender into signing anything that isn’t absolutely true. Don’t sign anything that has blanks or that you haven’t read.
· Know your rights. There is generally a three day penalty free right to cancel when you refinance your loan. If something doesn’t seem correct to you, don’t shy from invoking that right.
Refinancing your loan in order to access your home equity can be a wise financial move. Your home, however, is probably the largest portion of your net worth so proceed with caution and knowledge.
View our recommended Home Equity Loan Lenders here: Recommended Home Equity Loan Lenders and for refinance lenders: Recommended Refinance Lenders
Carrie Reeder is the owner of ABC Loan Guide, an informational website about various types of loans
Article Source: http://EzineArticles.com/?expert=Carrie_Reeder
When considering a home equity loan, there are several steps you should take to ensure you choose the refinancing package that is right for you.
· The current market for home equity loan refinancing is crowded and very competitive. As a homeowner you probably receive solicitations for loans almost daily via the telephone or the mail or the Internet. Be wary of accepting any of these solicitations without thoroughly investigating them. The best course of action might be to initiate your own independent search for a financial institution or mortgage broker. Also be aware of the fact that a mortgage broker in any loan situation is not automatically working to get you the best deal. You are the person who should take responsibility for making sure that the final loan product is the one you need. The Better Business Bureau, the yellow pages, the Internet and references from friends are all good places to start your search for refinancing your loan.
· You will need a certified appraisal for the actual loan. However, it is wise to have an idea of the value of your home before you begin the process of refinancing. There are many online services that will give you an estimate of your home’s value. Many times home sales are listed in the newspaper. Watch these listings for homes in your neighborhood that are similar to yours in size and condition. Note their prices.
· Know your credit score. By law you are allowed one free credit report a year. The credit reporting agencies that supply the report generally will also offer your FICO score for a small additional fee. There are other factors that influence your ability to obtain a home equity loan but your credit report and FICO score are good places to start.
· Once you have identified several possible sources for refinancing your loan, have the lenders explain the different loan products they offer. Don’t be afraid to ask specific questions and don’t be hypnotized by a low interest rate. A low interest rate alone is not sufficient reason to accept a loan proposal. Ask about the term of the loan and the closing costs. Make sure the lender explains any terms you may not fully understand such as points.
· Let the lenders know they are competing for your refinancing business. Sometimes a lender will sweeten your deal if there is the possibility the it might be lost otherwise.
· Have all proposals submitted in writing. Take the time to compare them and always make sure you are comparing the same types of things. For instance, don’t just look at the bottom line number on the closing costs see what each lender is including in the closing costs.
· Be alert to potential scams. Don’t be intimidated by your refinancing lender into signing anything that isn’t absolutely true. Don’t sign anything that has blanks or that you haven’t read.
· Know your rights. There is generally a three day penalty free right to cancel when you refinance your loan. If something doesn’t seem correct to you, don’t shy from invoking that right.
Refinancing your loan in order to access your home equity can be a wise financial move. Your home, however, is probably the largest portion of your net worth so proceed with caution and knowledge.
View our recommended Home Equity Loan Lenders here: Recommended Home Equity Loan Lenders and for refinance lenders: Recommended Refinance Lenders
Carrie Reeder is the owner of ABC Loan Guide, an informational website about various types of loans
Article Source: http://EzineArticles.com/?expert=Carrie_Reeder
Lowest Rates Home Equity Loan - How to Find the Best Home Equity Loan Interest Rates
When people think about applying for a home equity loan, lowest rates is the main thing they should pay their attention to because these rates will determine the amount of money they will have to repay each month.
You do not need to pay more than you have to. Only few simple steps can save you lots of cash in the long run. Following these strategies will assure financial stability and avoid rather unpleasant surprises in the future.
Home Equity Loan Amount
After you own your house for at least a couple of years a home equity builds up. The amount of credit you can get will equal the value of your home minus the amount you still owe for it. Even though it might be quite appealing to get the maximum cash on your home equity loan, it is not always required. If you need just few thousand dollars for one reason or another, you do not have to apply for all the money available for your home equity loan at the moment.
Keep in mind that the smaller the sum is, the more chances you have to get lowest rates on home equity loan.
Two different types of home equity loans: Adjustable Rate and Flexible Rate Home Equity Loan
When people are trying to get the lowest rates on home equity loan they can find, they might decide to select an adjustable rate plan. At first adjustable rate home equity loans are offering very small starting rates that can stay the same for a while. But there is totally no guarantee they will not go up later. Such loans have rather unpredictable interest rates and can raise to a large extent later This may increase your monthly costs so much that it will become a great financial weight for your household.
Fixed rate home equity loans however is a better solution and most homeowners will go for it. Even though the rates will be a bit higher than for adjustable rates, they will remain the same during the whole repayment period. This will give you a great benefit of predictable monthly payments and will ensure your financial stability.
As a conclusion, I would like to say that a thorough research is a must before applying for a home equity loan. A knowledgeable decision will assure that you get the lowest rates home equity loan! For more tips about how to find lowest rates home equity loans, please visit http://www.lowest-rates-home-equity-loan.com
Article Source: http://EzineArticles.com/?expert=Victoria_Munro
You do not need to pay more than you have to. Only few simple steps can save you lots of cash in the long run. Following these strategies will assure financial stability and avoid rather unpleasant surprises in the future.
Home Equity Loan Amount
After you own your house for at least a couple of years a home equity builds up. The amount of credit you can get will equal the value of your home minus the amount you still owe for it. Even though it might be quite appealing to get the maximum cash on your home equity loan, it is not always required. If you need just few thousand dollars for one reason or another, you do not have to apply for all the money available for your home equity loan at the moment.
Keep in mind that the smaller the sum is, the more chances you have to get lowest rates on home equity loan.
Two different types of home equity loans: Adjustable Rate and Flexible Rate Home Equity Loan
When people are trying to get the lowest rates on home equity loan they can find, they might decide to select an adjustable rate plan. At first adjustable rate home equity loans are offering very small starting rates that can stay the same for a while. But there is totally no guarantee they will not go up later. Such loans have rather unpredictable interest rates and can raise to a large extent later This may increase your monthly costs so much that it will become a great financial weight for your household.
Fixed rate home equity loans however is a better solution and most homeowners will go for it. Even though the rates will be a bit higher than for adjustable rates, they will remain the same during the whole repayment period. This will give you a great benefit of predictable monthly payments and will ensure your financial stability.
As a conclusion, I would like to say that a thorough research is a must before applying for a home equity loan. A knowledgeable decision will assure that you get the lowest rates home equity loan! For more tips about how to find lowest rates home equity loans, please visit http://www.lowest-rates-home-equity-loan.com
Article Source: http://EzineArticles.com/?expert=Victoria_Munro
Home Equity Loans - Best Source of Cheap Finance
If you are a fortunate owner of a home then a loan at easier terms including lowest possible interest rate is in your pocket just when you ask for it. This is made possible by lenders who provide home equity loans. The borrower can make use of home equity loans for whichever purpose like making home improvements, part financing a vehicle, meeting medical or educational expenses or enjoying a holiday tour.
Home equity loans are approved on the basis of equity in the home that the loan applicant is willing to offer as collateral to the lender. Equity in a home is calculated on the current market value of the home and the balance amount the homeowner owes subtracted from the value of the home. So as the market value of the home increases, its equity also goes up. Similarly the equity rises with gradual decrease in the debts on the home. It is on equity that the borrowed amount is decided. One can say that home equity loans are more secured loans for the lenders. This is because in case of payment default, lender is sure to get back the loan as the amount offered under the loan never exceeds the equity.
Because of being equity based, home equity loans have lower interest rate. The interest rate is lower than any other secured loans. But the loan seeker has to offer his home to the lender as collateral. So if there is a payment default the lender may sell the home for recovering the loan. Make sure that you pay the loan installments regularly. You are given a larger convenient repayment duration for timely pay off of the loan. You may avail home equity loans for even 25 years. This enables in saving money for other usages as monetary outgo towards monthly installments gets reduced considerably.
Home equity loans are available easily to bad credit people who have faced CCJs, arrears, payment defaults or even those who have filed for bankruptcy. With home equity loans well secured by the home of the applicant, there are no risks in offering the loan. Hence bad credit is in fact no impediment in the way of the loan.
Many lenders have showcased their home equity loans offers on their websites. Compare their interest rates and other terms prior to making a deal. Apply online to the suitable lender for fast processing and approval of home equity loans.
Home equity loans are cheaper source of finance. Your own home and equity becomes a tool of availing the loan at lower interest rate. Pay off the installments regularly to avoid debts and for enhancing credit score.
Amanda Thompson holds a Bachelor’s degree in Commerce from CPIT and has completed her master’s in Business Administration from IGNOU. She is working as financial consultant for chance for loans . To find a Home equity loans, Cheap rates, Unsecured personal loans, Personal loans, Secured loans, Improvement loans at cheap rates that best suits your needs visit http://www.chanceforloans.co.uk
Article Source: http://EzineArticles.com/?expert=Amanda_Thompson
Home equity loans are approved on the basis of equity in the home that the loan applicant is willing to offer as collateral to the lender. Equity in a home is calculated on the current market value of the home and the balance amount the homeowner owes subtracted from the value of the home. So as the market value of the home increases, its equity also goes up. Similarly the equity rises with gradual decrease in the debts on the home. It is on equity that the borrowed amount is decided. One can say that home equity loans are more secured loans for the lenders. This is because in case of payment default, lender is sure to get back the loan as the amount offered under the loan never exceeds the equity.
Because of being equity based, home equity loans have lower interest rate. The interest rate is lower than any other secured loans. But the loan seeker has to offer his home to the lender as collateral. So if there is a payment default the lender may sell the home for recovering the loan. Make sure that you pay the loan installments regularly. You are given a larger convenient repayment duration for timely pay off of the loan. You may avail home equity loans for even 25 years. This enables in saving money for other usages as monetary outgo towards monthly installments gets reduced considerably.
Home equity loans are available easily to bad credit people who have faced CCJs, arrears, payment defaults or even those who have filed for bankruptcy. With home equity loans well secured by the home of the applicant, there are no risks in offering the loan. Hence bad credit is in fact no impediment in the way of the loan.
Many lenders have showcased their home equity loans offers on their websites. Compare their interest rates and other terms prior to making a deal. Apply online to the suitable lender for fast processing and approval of home equity loans.
Home equity loans are cheaper source of finance. Your own home and equity becomes a tool of availing the loan at lower interest rate. Pay off the installments regularly to avoid debts and for enhancing credit score.
Amanda Thompson holds a Bachelor’s degree in Commerce from CPIT and has completed her master’s in Business Administration from IGNOU. She is working as financial consultant for chance for loans . To find a Home equity loans, Cheap rates, Unsecured personal loans, Personal loans, Secured loans, Improvement loans at cheap rates that best suits your needs visit http://www.chanceforloans.co.uk
Article Source: http://EzineArticles.com/?expert=Amanda_Thompson
The Benefits of a Fixed Home Equity Loan
Although a home equity loan can be an inexpensive way to borrow money, it's
smart to choose one with the best rates and terms. And, in today's market, a fixed-rate home equity loan may be your best choice. That's because…
Current Rates Are Rising
By choosing a fixed-rate home equity loan, you essentially "lock in" the rate
for the life of the loan. Interest rates are on the rise, which means each
week--or even each day--the rate you'll get charged for your home equity loan
may be increasing. By locking in the rate now with a fixed-rate loan, you'll
never have to pay a higher rate (unless you refinance your loan).
You Won’t Be Tempted to Keep Buying
To get a fixed rate, you have to choose the type of home equity loan that dishes
the money out in one lump sum. Home equity lines of credit, on the other hand,
allow you to dip into the account over and over again. The downside: home equity
lines of credit are almost always adjustable-rate loans, which means your
interest rate could increase over time. By choosing the fixed-rate home equity
loan and getting your cash all at once, you won't be tempted to borrow from the
account over and over again.
You’ll Know Exactly What Your Payments Will Be
Since your interest rate is fixed and never changes over time, and since you can
only borrow one lump sum, your payments will stay exactly the same during the
life of the loan. That makes it easier for most folks to budget since they know
how much they need to make their monthly payments. If you choose an
adjustable-rate loan, on the other hand, your minimum monthly payment amount can
fluctuate from month to month, making it much more difficult to manage your
budget and finances.
There are many advantages to a fixed-rate home equity loan, including consistent
payment amounts and the ability to lock-in a low interest rate. In general, it's
best to avoid an adjustable-rate loan unless the current interest rates are
extraordinarily high, and experts predict they'll fall in the future.
To learn more about a fixed rate home equity loan, or to browse our recommended lenders for the best home equity loan interest rate, visit Carrie Reeder's website, ABC Loan Guide
Article Source: http://EzineArticles.com/?expert=Carrie_Reeder
smart to choose one with the best rates and terms. And, in today's market, a fixed-rate home equity loan may be your best choice. That's because…
Current Rates Are Rising
By choosing a fixed-rate home equity loan, you essentially "lock in" the rate
for the life of the loan. Interest rates are on the rise, which means each
week--or even each day--the rate you'll get charged for your home equity loan
may be increasing. By locking in the rate now with a fixed-rate loan, you'll
never have to pay a higher rate (unless you refinance your loan).
You Won’t Be Tempted to Keep Buying
To get a fixed rate, you have to choose the type of home equity loan that dishes
the money out in one lump sum. Home equity lines of credit, on the other hand,
allow you to dip into the account over and over again. The downside: home equity
lines of credit are almost always adjustable-rate loans, which means your
interest rate could increase over time. By choosing the fixed-rate home equity
loan and getting your cash all at once, you won't be tempted to borrow from the
account over and over again.
You’ll Know Exactly What Your Payments Will Be
Since your interest rate is fixed and never changes over time, and since you can
only borrow one lump sum, your payments will stay exactly the same during the
life of the loan. That makes it easier for most folks to budget since they know
how much they need to make their monthly payments. If you choose an
adjustable-rate loan, on the other hand, your minimum monthly payment amount can
fluctuate from month to month, making it much more difficult to manage your
budget and finances.
There are many advantages to a fixed-rate home equity loan, including consistent
payment amounts and the ability to lock-in a low interest rate. In general, it's
best to avoid an adjustable-rate loan unless the current interest rates are
extraordinarily high, and experts predict they'll fall in the future.
To learn more about a fixed rate home equity loan, or to browse our recommended lenders for the best home equity loan interest rate, visit Carrie Reeder's website, ABC Loan Guide
Article Source: http://EzineArticles.com/?expert=Carrie_Reeder
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