What You Need To Know About Home Equity Loans
30821
Finance > Loans
May 11, 2007
james_copper
What You Need To Know About Home Equity Loans
A home equity loan is a popular and attractive source of borrowing for thousands of people. Part of the reason people think first of a home equity loan when they need a substantial sum of money is that home equity loans are marketed extensively, with advertisement in every medium. Lenders love home loans because they are highly risk free. Therefore, a home equity loan is easy to get and offers one of the best interest rate of any type of high end loan. A equity loan is attractive for consumers, not only because of the low interest rate but because that interest can be deducted from income taxes. The outlook isnt completely rosy for consumers who are considering a home equity loan, however. With any home equity loan you can borrow only up to 80 percent of the equity youve accrued in your home at the time of your loan application. If, for example, your homes current market value were 150,000 and the balance on your mortgage was 70,000 you could borrow 80 percent of the 80,000 equity, or 64,000. Consumers should not make the decision to take out a home equity loan lightly. Nor should they borrow to the maximum 80 percent just because they can. Borrow only what you have to have. Not only will this save you money in the long run but a loan officer who sees you being foolish about your willingness to put yourself in debt and your home at risk may think twice about your having the responsibility to pay back your mortgage - and on time. Sometimes a home equity loan is used foolishly for a vacation or toys such as boats and other things that the consumer could really do without. The borrower assumes that their home will appreciate in value over the term of the loan so it really isnt like borrowing or paying interest, is it? What if the home doesnt appreciate? What if the local mill or factory or other major employer closes down and the town loses a big chunk of property taxes and people move it and then the retail shops lose money and so forth and so forth. If you dont live in the Mid-Atlantic States or the rust belt talk to people who did or do. Hear what they have to say about the likelihood of this occurring. No matter where you live downsizings, mergers, company closures, layoffs and buyouts are commonplace. There is just no way to predict that your home will appreciate, your job will be secure and youll be financially better off at the end of the loan and throughout the life of the loan. A home equity loan, while often a wise thing, and a necessary action, shouldnt be taken on for frivolous desires. There are occasions, such as lowered home mortgage interest rates and to get out from under high interest unsecured loans such as credit card debt when a home equity loan can save you money and improve your credit standing. When this opportunity arises, assuming you have the equity and can afford the payments, a home equity loan can be a very wise decision.
James Copper runs Any Loans - http://www.any-loans.co.uk/no-credit-check-loans.shtml - a no credit loan specialist.
send email to james_copper
Write a Review
Add to My Favorite
Refer it to Friend
Report Article
Other links owned by this user
This article is about many different sources of renewable energy
Category:
This article looks at how someone can get a fast remortgage and clear away their financial problems.
Category:
This article looks at how someone can have a career in energy and what they will learn.
Category:
This article looks at the different types of business loans available and how someone can get one.
Category:
This article looks at how someone might re-train and become a Home Inspector.
Category:
An article describing what repossession is and ways of preventing it from happening to you
Category:
This article aims to give some insight into the world of green energy.
Category:
An article on tidal power and why you should work with water
Category:
Other links at Finance > Loans
High risk loans are sometimes the only option for those who are credit challenged. Sadly, poor credit dogs more and more people in the United States every day and because of this the demand for high risk credit loans is at an all time high. The good news
Category:
House prices continued to rise over the course of June, new figures have indicated.
Category:
Millions of young people looking to get on to the property ladder are aiming to take out a mortgage worth more than four times their annual salary, it has been suggested.
Category:
The idea that all payday loans are evil and will impoverish your checking account is probably something that you have noted really frequently. Genuinely, the payday advance commerce tends to receive a smidge of a bashing, however if you are smart in how y
Category:
Those looking to get married should be conscious of the financial pressures the big day can entail, it has been suggested.
Category:
Site Sponsor
Directory Statistics
Articles: 68252
Categories: 501
Yahoo Entertainment
