Understanding the Fixed Rate Home Equity Loan
Are you a homeowner that needs a large sum of money? There are various reasons why you might. Maybe you need to pay for home repairs, education costs, or debt consolidation. One of the best ways to gain access to the money you need when you need it is to utilize the equity in your home. A fixed rate home equity loan is a popular choice for many homeowners who need to borrow a large amount of money at once.
If you're considering one of these loans, you should first understand how they work. First, let's take a look at what equity is. Equity is the difference between the current value of your home and the amount of your mortgage. For example, let's say your home is currently worth $200,000. Suppose you've paid $20,000 so far on your mortgage. This means you have $20,000 in equity pending that your original mortgage amount was $200,000. If it was less and your home has increased in value, you'll have even more equity. Normally, you will be allowed to borrow approximately 75 percent of your current equity or less.
As specified before, the rates on a home equity loan are fixed. This means they do not fluctuate with the changes of the housing market like home equity lines of credit do. Your rate will stay the same throughout the life of the loan, unless of course you refinance. If you take out an equity loan then discover down the road that rates are lower, you can refinance your loan. This will give you lower rates which means lower payments. Many people refinance at least once during the term of their loan.
Speaking of terms, the fixed rate home equity loan is one that can be taken out for anywhere from five to thirty years. If you can afford the payments, stick with shorter terms to get the loan paid off more quickly and rebuild your equity. If not, go with a longer term that provides more affordable monthly payments. If you ever decide to change the terms of your loan, refinancing can help you with this as well. Once you decide that a home equity loan is the right choice for you, speak to a qualified lender to get the process underway. You may want to compare rates from different lenders, to make sure you end up with a loan at the best fixed rate possible.
Copyright 2007 Jim Sterling - All Rights Reserved
Home Equity Loan News:
| A Brief History of Home Equity Loans (Portfolio.com via Yahoo! Finance) Louise Story has an excellent history of the home equity loan on the front page of today's NYT. She talks a lot about the explosion in such products -- outstandings rose a thousandfold, to $1 trillion, from the early 1980s to today -- as a product of clever bank marketing campaigns: ... | ||
The new housing credit sounds good, but it's really a loan, so . - Boston Globe
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A Brief History of Home Equity Loans - Conde Nast Portfolio A Brief History of Home Equity Loans Conde Nast Portfolio, NY - 15 Aug 2008 Louise Story has an excellent history of the home equity loan on the front page of today's NYT. She talks a lot about the explosion in such products EURŠ.. | ||
Banks cut back on home-equity credit lines - Richmond Times Dispatch Banks cut back on home-equity credit lines Richmond Times Dispatch, VA - 16 Aug 2008 Loan limits are being frozen or reduced across the board on credit cards, home-equity loans and all lines of credit, said Carol Kaplan, spokeswoman for ... | ||
Rising Cost of Debt Stokes Fears - Wall Street Journal
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Various personal loans This loan is just similar with home equity loans. They only differ in the flexibility of credit line. Once this type personal loan is approve, you can get additional funds that you can use in covering all the expenses that you need. ... | ||
Bankers find opportunities (The Cincinnati Enquirer) While some lenders are backing out of the distressed home loan market, two local industry veterans are getting back into the business... | ||
Questions and answers on hiring an appraiser (AP via Yahoo! News) Questions and answers on how consumers can ensure they are getting an honest appraisal when buying or selling a home, refinancing an existing mortgage or taking out a home equity loan or line of credit:.. | ||
U.S. MBA's Mortgage Applications Index Fell 1.5% (Update1) (Bloomberg.com) The Mortgage Bankers Association's index of applications to buy a home or refinance a loan dropped 1.5 percent from the prior week to 419.3. The group's purchase index fell 0.4 percent and its refinancing gauge slumped 3.7 percent... | ||
Wachovia Limiting Home Equity Credit Lines (The Tampa Tribune) TAMPA - Wachovia Corp. has begun cutting home equity credit lines for a small percentage of its customers, the company said today... | ||
Hit Up Your Uncle Sam For That College Loan (KTRE Lufkin and Nacogdoches) For years, college students and their parents have relied heavily on credit cards, home equity, and private loans to pay for school, according to a recent survey provided exclusively to BusinessWeek ... | ||
Home Equity Frenzy Was a Bank Ad Come True - New York Times Since the early 1980s, the value of home equity loans outstanding has ballooned to more than trillion from billion, and nearly a quarter of Americans EURŠ Banking on banks The Australian all 11 news articles... | ||
Bad Credit Home Equity Loans Accessible to Everyone Bad credit home equity loans are those that you are able to obtain despite your having a poor credit score... | ||
Wachovia Sells Land, Construction Loans - TheStreet.com
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How did we get into this mess? - Joliet Herald News
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Choosing Low Interest Home Equity Loans Are you serious about getting a loan against your home It is best to consider obtaining low interest home equity loans... | ||
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