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Home Debt Consolidation Equity Loan
Home equity loans:
A home debt consolidation equity loan allows you to use the equity in your home to receive a lump sum that you can use to pay off various bills or make home improvements.
The amount you can receive for a home equity loan is partly based on a percentage of the appraised value of your home.
The amount you still owe and how much you have already paid also plays a part in determining the amount of your loan.
For example: You have a home appraised at $200,000.00 then 80% of that amount is $160,000.00. You still owe $100,000.00 on your mortgage. That leaves you with $60,000.00 equity.
Home equity loans are usually easier to obtain since you are using your home as collateral. Using the money to pay off credit cards is useful since credit cards carry much higher interest rates than home equity loans.
Home equity loans are not financed for as long a term as your first mortgage. They are usually financed for 5-15 years and must be repaid from the money you receive if you should sell your home before the home equity loan is paid off.
Keep in mind that additional expenses may accompany home equity loans. These extra expenses could include points, application costs, appraisal fees and the cost of having a credit check done. Many or all the charges may be waived if you pay more points up front.
Home equity loans, like first mortgages, are available with fixed or variable interest rates.
Doing your research is the key to a home equity loan. There are many options. You can go through banks, mortgage companies, or get a loan from a company online.
Compare rates, fees and services provided by the different companies and go with the one that best suites your situation.
If you need help deciding what is best for you, a home equity line of credit or a home equity loan, try this
calculator.
A home equity loan is a second mortgage that lets you turn equity into cash, allowing you to spend it on home improvements, debt consolidation, college education or other expenses.
Equity: is the difference between how much the home is worth and how much you owe on the mortgage (or mortgages, if you have a home equity loan).
Collateral: is the property that you pledge as a guarantee that you will repay a debt. If you don't repay the debt, the lender can take your collateral and sell it to get its money back. With a home equity loan, you pledge your home as collateral. You can lose the home and be forced to move out if you don't repay the debt.
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