Home Equity Loan

How to calulate your home equity

noreply@blogger.com (Rupert Hines III) — Mon, 07 Jan 2008 08:01:13 PST

How To Compute Your Home Equity
By [http://ezinearticles.com/?expert=Vanessa_A._Doctor]Vanessa A. Doctor

A home equity loan is one credit facility, which lets you borrow money using the equity in your property as collateral. Equity refers to the amount of money you've already paid on your mortgage. With such a loan, you can borrow against the equity, and what you do with the cash you get is up to you.

There are good and bad reasons for getting a loan. Before you start looking for one, ensure that you have a definite goal for the money, which is one that is part of a coherent strategy that will increase finances, and make the process of acquiring a home a relatively hassle-free one.

Basic Facts

Your home equity is that part of your home's value (in dollars) which is actually yours. In effectively computing it, follow these steps. First, you need to find out what your home's current value is. In doing so correctly, get the assistance of an appraiser if you want to get the accurate value.

The next step is to find out what you still owe. In computing this, simply add up your down payment and payments that have applied to the principal balance, then subtract the sum from the original amount of the mortgage.

In doing this right, do not add the interest rates. The result would be the amount of money you owe your home The next thing is to deduct the amount that you owe on your home from your current value. The result would be your home equity, which is the combination of your down payment, payments toward the principal and value from property appreciation.

How To Find Out If A Fixed-Rate Is Better Than A Lump-Sum Loan

A Fixed Rate loan is where a bank will loan you an amount that is equal to a certain percentage , and the standard is from 70 to 80%, of your home equity.

The actual percentage depends on various factors including the borrower's credit record, payment history, etc. In some instances, a loan may be made for the whole amount, however such cases are generally rare. In situations where this happens, the borrower usually has a pristine credit record.

How To Get A Home Equity Loan

If you are inclined to get a loan, you will first need to apply for it, get your home appraised then wait for approval. Once you get approved, your money will be released in one, lump sum. This type usually has a fixed or predetermined period. The period may range from a few years to a few decades, with an interest rate also fixed for the whole duration of the loan.

There are also some which have a balloon-payment structure. In this type of loan, the fixed interest rate is generally quite low. However, the period is usually less than 10 years. When the loan period nears conclusion, the borrower will have to make a payment in full.

Positive Aspects Of A Lump-Sum, Fixed-Rate Loan

In this type of option, the fixed rate ensures the security of your loan. As such, you will know exactly what your interest rate is every year for the whole period. You can also make financial projections with a high degree of certainty.

In addition, obtaining your home equity loan in one big sum is great if you have other debts that you wish to pay off. Through this method, you can deal with all of your debts in one swing, and immediately make significant reductions in your overall interest rate payments.

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Tips For Finding a Great Home Equity Loan Interest Rate

noreply@blogger.com (Rupert Hines III) — Wed, 05 Dec 2007 03:44:57 PST

By Terry Edwards

If you are a homeowner and have mounting debts, then it may be a good idea to get a home equity loan. But it is very important that you find a good home equity loan interest rate before you agree to sign anything. Read on to discover more tips on finding a good home equity loan.

A home equity loan is a secured loan because you are using your home as collateral. You must take into consideration your ability to make your payments, because failing to make payments on your home equity loan can result in you losing your home.

It is also important that you find a great home equity loan interest rate. Do some shopping around to find a lender that can give you the best interest rate. It is also imperative that you know your credit score before you shop for a loan. The higher your credit score, the better home equity interest loan you are entitled to.

Check with you tax adviser, because home equity loans are usually tax deductible, which could save you a lot of money at tax time. It is also a good idea to make use of a rate calculator or a home equity loan calculator so that you will have an idea of what your payments are going to be before you commit to anything. You can find free home equity loan interest rate calculators online.

If you are going to use your home equity loans to pay off credit card debts, you need to take a long hard look at your spending habits. Examine how you got into debt in the first place and make a plan to change. Get rid of all of your credit cards so that you don't get into debt again. If you cannot be committed to getting rid of your credit cards, then you will probably rack up credit card debt again and be in worse shape than you were to begin with. Taking debt management classes may be a good idea to help you get a handle on your spending habits.

Finding a good home equity loan interest rate is not hard if you shop around. Always know what you are signing before you sign it. Make sure there are no hidden fees or charges in your contract. Educate yourself and you less likely to be taken advantage of and more likely to find a great home equity loan interest rate.

You can learn more about [http://www.HomeEquityLoansA-z.com/Home_Equity_Loan_Interest_Rates.html]Home Equity Loan Interest Rates as well as more information on everything to do with home equity loans and home equity lines of credit by visiting http://www.HomeEquityLoansA-Z.com

A Home Equity Loan is Available to all Home Owners

noreply@blogger.com (Rupert Hines III) — Thu, 26 Apr 2007 17:22:14 PDT

By Shane Van Niekerk

A home equity loan is available to all home owners as it is the difference between what is owed on a home and the value of the home. Most applicants qualify as the bank will check their credit record and want documented proof of monthly earnings in order to ascertain whether or not they are capable of paying off the monthly payments.

Home owners may borrow this equity whenever they need cash for any purpose. There is no control exercised by the bank on what the borrower spends the money on. As soon as a loan has been paid of in full they are at liberty to apply for another one if they require cash again.

The home equity loans are very popular with home owners and banks and money lenders alike. They are mostly used by home owners to finance improvements on their homes. Periodically repairs and renovations have to be done on the home to keep it up to the current market value. If this is not done the resale value of the home could be much lower than expected.

The banks and money lenders like these loans because they are secured against the borrower’s home and they do no stand a risk of losing their money. They also make huge profits from the interest rates and loan charges.

Because this facility is always readily available to home owners many of them take these loans but do not have any specific project in mind. This is considered to be spending money. This is not a good idea as you will be paying interest and loan costs to borrow this money and you will probably just be wasting it. If you were to get into financial difficulty and could no longer pay off the loan you could stand the chance of losing your home to the bank or money lender.

This author writes informative articles on various subjects.

http://www.homeequityloanlist.com

Home Equity Lines of Credit - HELOCs - How They Work

noreply@blogger.com (Rupert Hines III) — Wed, 25 Apr 2007 14:40:54 PDT

By C.L. Haehl

A HELOC, also known as a home equity line of credit, is a line of credit drawn from the equity of your home. Due to the fact that these loans are lines of credit, you are typically given a maximum amount of monies that you can draw from. They work similar to the way in which a credit card works. However, the financing rules and benefits, as well as the repayment terms are different than that of a credit card.

Initial Interest-only Payments

When you take out a home equity loan, in the beginning years of the loan, you will be paying monthly payments on the interest-only. You are allowed to make additional payments towards the principle of the loan. If you do this, then it is important that you check with your lender periodically, to make sure that they are correctly crediting your outstanding loan balance.

Different Terms

With some HELOCs there is the possibility of a prepayment penalty, so make sure you check that out before you chose that specific loan. There are some HELOCs that have balloon payments. This means that your monthly payment will continue to be interest-only until at the maturity time, you will then payoff the outstanding principle balance. On the other hand, some HELOCs are structured so that after the interest-only payment period of the loan is completed, the loan then becomes self-amortizing. Self-amortizing means that the monthly payment becomes large enough to cover both the interest expense and the reduction of principle balance over the remaining term of the loan. Simply, this means that if you have the interest-only period of the loan for the first 10 years and the self-amortizing period for 10 years after that, then at the time of maturity, or the 20 years, you will then be in a position to pay off the outstanding balance.

Convert to a Home Equity Loan

There are some HELOCs that are structured in a way where they can be converted into a home equity loan. If you have any questions on a HELOC, then it is important that you talk with your broker or lender.

Reputable HELOC Lenders Online - We maintain a list of recommended mortgage companies online and update the list regularly.

Poor Credit? Here Are 50 Things You Can Do To Increase Your Credit Score.- Read this article to learn 50 things you can do to raise your credit score.

Second Mortgage / Home Equity vs. Refinance

noreply@blogger.com (Rupert Hines III) — Mon, 23 Apr 2007 11:19:24 PDT

By Benjamin Ehinger

Why should you take out a second mortgage or a home equity line of credit instead of refinancing?

Well,………You Shouldn’t!!

Why Not?

1. Second Mortgages usually have an interest rant that is twice or even three times as high as your first mortgage rate. You can refinance instead and keep a very low rate. In the long run a second mortgage will just cost you money in interest charges.

2. Home equity lines of credit are designed for mortgage account executives (salespeople) to sell you on using it like a credit card attached to your home. They will try to convince you to use it over and over again.

3. A refinance loan is better for the equity in your home. Very few companies will refinance your home at 100% of it’s value without forcing you to take out a second mortgage. You don’t want to use 100% of your equity because that means you no longer have that equity to fall back on in emergency situations.

4. Second Mortgages and Home Equity lines of credit are designed to provide account executives (salespeople) with another tool to sway you into putting another commission in their pocket.

5. Your equity is a precious thing and should not be used for unnecessary add ons or impulse buys. If you don’t need it and there is even a slight chance you can’t afford it, then don’t get a second mortgage to buy it.

The only reason that I would ever recommend a second mortgage or a home equity line of credit is in an emergency situation. Only when there is no other option and you must take out a loan would I recommend either one of these options.

About the Author

Benjamin Ehinger has an extensive mortgage background and has studied the industry for many years. To learn more about Refinancing and Second Mortgages visit:
http://bandcdriver.tripod.com/second-mortgage.htm

No Income Verification Home Equity Loan

noreply@blogger.com (Rupert Hines III) — Thu, 12 Apr 2007 05:22:32 PDT

By Levetta Rivera

A no income verification home equity loan is a second mortgage loan that does not require you to provide income documentation to qualify for the loan. This type of loan is great for homeowners who need a home equity loan but have hard to document income.

The majority of borrowers with hard to document income are either self-employed or commission based employees. Consumers who fall under these categories may have high income but have a lot of business related deductions that they write off on their taxes. This is good on the one hand as it reduces the taxable income and thus the amount of taxes owed, however, when it comes to getting a home loan it can hurt as most lenders use the average of your last 2 years taxable net income (the amount left after all of your deductions) to determine your income figure for qualifying purposes. This may cause you to have a debt to income ratio problem if you have a high debt load and thus keep you from qualifying for the loan. With a no income verification home equity loan, however, your gross income can be used for qualifying purposes as opposed to the net income.

In order to qualify for a no income verification home equity loan you will, in most cases, need good credit and a high credit score. Expect to pay a higher rate for this type of loan as opposed to a traditional loan in which you have to document your income. Also, even though a no income verification loan does not require you to document your income, some lenders may require that you have a certain dollar value of assets on hand which must be verified. Not all lenders have this requirement though - some lenders offer a program called NINA which stands for "no income no assets" meaning you do not have to document either. Loan guidelines and rates vary from lender to lender so it is a good idea to shop around to increase your chances of getting the best deal available to you.

For more information on no income verification home equity loans, or to compare rates and programs of home equity loan lenders visit http://www.equityloansource.com

Levetta Rivera is a successful mortgage broker and publisher of the following financial websites: http://www.equityloansource.com and http://www.militaryvaloan.com

Things To Look For In A Home Equity Loan Lender

noreply@blogger.com (Rupert Hines III) — Mon, 02 Apr 2007 19:15:59 PDT

By C.L. Haehl

Selecting the right home equity loan lender is a process that you shouldn’t take lightly. There are many lenders available today and often homeowners will receive several solicitations a week regarding the refinance of their home, especially when their credit is good. The right home equity loan lender can provide you with the best possible loan that fits all of your needs.

Consider What They Are Offering

When you work with a home equity loan lender, one of the first things you want to learn is what they can offer you. You should be looking at:

• The lowest possible interest rate

• The right terms for the equity loan

• The amount of equity that is available and what you are getting

• The closing costs, appraisal fees and other costs to you

• The turn around time for when the funds are available to you.

These things play a significant role in what it will cost you to secure the home equity loan; therefore you should want to find a lender that offers the best possible rates here.

More To Consider

There are other aspects to consider as well. For example, you should learn who the home equity loan lender is and what specific history they have regarding home equity lending. It is essential to consider their history with consumers by checking the Better Business Bureau’s website. Do they have a good reputation?

A lender that can pull together a good reputation with customers and can provide an affordable home equity loan is the right home equity loan lender to work with. It takes just minutes to learn about lenders on the web. Even more so, it can help you to secure the lowest costing loan that fits all of your needs as well.

List of Suggested Home Equity Loan Lenders - We maintain a list of recommended mortgage companies online and update the list regularly.

Things to Know Before Getting a Home Equity Loan- Read this article to find out 50 things you should know before getting a home equity loan.

Article Source: http://EzineArticles.com/?expert=C.L._Haehl
http://EzineArticles.com/?Things-To-Look-For-In-A-Home-Equity-Loan-Lender&id=509854

125% Equity Home Loans

noreply@blogger.com (Rupert Hines III) — Mon, 19 Mar 2007 10:27:57 PDT

By Levetta Rivera

If you are a homeowner in need of a home equity loan but you have not yet built up any equity in your home, don't despair. A 125 percent equity home loan may be the answer.

A 125 percent equity home loan is a second mortgage loan that allows you to borrow up to 25% more than the value of your home. For example, if your home is worth $100,000 and you owe $100,000 on the mortgage, this loan program would allow you to still borrow up to $25,000.

The 125 percent equity home loan is offered by various online lenders. Each lender has their own qualification and loan term guidelines but generally this is a credit score driven loan program. Credit score driven means that you have to have a certain credit score to qualify for the loan. In addition, your credit score usually determines the maximum loan amount you may qualify for and the maximum cash in hand you may receive. Also, some 125 percent equity home loan lenders may require seasoning on the length of time you have lived in your home. Three months is normally the minimum.

When it comes to a property appraisal, most 125 percent home equity loan lenders do not require you to obtain one. They generally will use the purchase price of your home as the value if you have lived in your residence for 12 months or less. If you have lived in your home over 12 months, a recent tax assessment, simple drive-by appraisal, or automated value model (avm) can be used. An avm is a computer generated assessment of your home's value which is based on recent home sales of comparable houses in your neighborhood.

For more information on 125% home equity loans, or to compare rates and programs of 125% home equity loan lenders visit http://www.equityloansource.com

Levetta Rivera is a successful mortgage broker and publisher of the following financial websites: http://www.equityloansource.com and http://www.militaryvaloan.com

Article Source: http://EzineArticles.com/?expert=Levetta_Rivera
http://EzineArticles.com/?125%-Equity-Home-Loans&id=742

No Income Verification Home Equity Loan

noreply@blogger.com (Rupert Hines III) — Thu, 11 Jan 2007 16:01:49 PST

Home Equity Loans - Why Lenders Love Them

noreply@blogger.com (Rupert Hines III) — Wed, 10 Jan 2007 13:02:40 PST

By J Krohn

Home equity loans are the hottest loan product in the market place today. Why is that?

Lenders have been promoting home equity loans and home equity lines of credit profusely in recent years for good reason. It is virtually impossible to watch television or listen to the radio without hearing or seeing and ad for a home equity loan. For lenders a home equity loan or home equity line of credit represents a relatively safe risk for a better return than a first mortgage home loan using the same collateral-the home.

The reason consumers love these loans so much is the rates are so much lower than credit card rates (by about 50%), which is significant, and the interest can be deductible.

In 2004 home equity loans were the fastest growing, most profitable area of consumer lending. For a home equity loan the risk of loss is less than half of that for credit card debt at 0.15%. Home equity lending increased an amazing 278% from 1999-2004 for those very reasons. Lenders love home equity loans which may in itself be a warning sign. If the borrower defaults, the lender forecloses on the property and turns around and sells it. In a positive housing market that can mean a big windfall profit for the lender.

So the reasons seem obvious. Lenders love these types of loans because they make so much money on them with relatively little risk because your home is the collateral. The chances of default are minimal. If there is a default there is potential for big upside for the lender.

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Home Equity Loan – Cashing in On Your Equity

noreply@blogger.com (Rupert Hines III) — Thu, 07 Dec 2006 16:13:48 PST

By NamSing Then

This is a type of loan under which a property owner uses his residence as collateral security and can get prearranged amount against the property. The loan allows you to use into your home's built-up equity. Home equity is the actual difference between the amount your home could be sold for and the amount that you already owe on the mortgage. Assume that the market value of your home is $200,000 and you owe $70,000 on your mortgage, then you have $130,000 equity available on your home. Remember that if you have more than one mortgage taken on your property, then all of them have to be considered for calculating the outstanding dues.

A home-equity loan is a good way to borrow money for two main reasons:
· The interest rate is one of the lowest loan rates a borrower can get.
· The interest you pay on the loan is tax-deductible. Thus it is sometimes recommended by many to replace other consumer loans whose interest is not tax-deductible, such as auto loans, credit card debt, and medical debt with the Home Equity Loan.

Caution: If you don't repay the debt, you can risk losing the home and be forced to move out.

There Are Two Types of Home Equity Loans

1. The standard home equity loan,

2. The home equity line of credit (HELOC’s)

In a standard home equity loan, a pre specified amount of money is loaned in a lump sum for a specified period of time and the same amount of interest is paid every month. It is also called a term loan, a closed-end loan or a second mortgage installment loan.

HELOC works similar to a credit card because it has a revolving balance. A HELOC allows you to borrow up to a certain fixed amount for a specified period of the loan which is set by the lender. During that time period, you can withdraw as much money as you need. As you clear the principal, you can use the credit again, like a credit card.

These loans are repaid in a shorter period of time than the first mortgages. They often have a repayment period of 5 to15 years.

The loan could be either a fixed interest rate or a variable interest rate.

Homeowners often use a home-equity loan for home improvements or debt consolidation or to pay for a new car or to finance their child's college education.

NamSing Then is a regular article contributor on many topics. Be sure to visit his websites Equity Loan Resources, Home Equity Loan Information and Fixed Rate For Home Equity Loan

Article Source: http://EzineArticles.com/?expert=NamSing_Then

125% Equity Home Loans

noreply@blogger.com (Rupert Hines III) — Thu, 23 Nov 2006 06:25:49 PST

Home Equity Loan – Is It for You?

noreply@blogger.com (Rupert Hines III) — Thu, 16 Nov 2006 02:33:07 PST

By Jack Tanner

A home equity loan can be a great source of extra cash. But, first consider the warning from the Federal Trade Commission – "Borrowers beware!"

A home equity loan is a second mortgage in which you pledge your home as collateral. Borrowing money this way can help you get extra cash for home improvements, debt consolidation, college educations or investments. And the interest you pay may be deductible on federal and state tax returns. Sounds good, doesn't?

But, all that glitters isn't gold. When you put your home – your most valuable personal asset – to work like this, you're also putting it at great risk and you could end up losing the "family farm."

Home equity loans are only recommended for homeowners with stable incomes sufficient enough to cover monthly payments and for people with no intention of selling their home before the second mortgage comes due.

But exploitive lenders are not promoting home equity loans to people who are good credit risks. These scammers are going after the elderly, minorities and those with low incomes or poor credit ratings. And, no matter how attractive they may sound, second mortgages are not for the vulnerable or the desperate.

Unscrupulous lenders may act like they're taking a gamble on a risky investment, but when you hold it up to the light of day and take a good look, they have nothing to lose. This means they can offer you any deal you want – even if it's not to your advantage - to entice you to refinance or piggy-back a second mortgage.

These guys always win. If you pay your loan back on time, they make money. And, if you miss a payment or are unable to sell your home at a price high enough to cover all of your mortgage debt, they make money. That's when the sharks come in for the kill. They put you into foreclosure, take your home and all of the equity you may have in it.

But there are ways you can protect yourself. To begin with, never allow the promise of extra cash, easy loan approval or lower monthly payments cloud your judgment, especially if the offer is being made by a stranger. And never let someone pressure you into making a decision and signing a contract. If it's such a good deal, it can wait for you to check it out with a knowledgeable friend or family member, your local Better Business Bureau or even the Federal Trade Commission at 1-877-FTC-HELP.

Also, never sign an agreement without reading it first. Better yet, get a second opinion. Check all documents first with someone you can trust who knows about mortgages and real estate.

The best way not to be a home equity loan victim is to deal only with established lenders you absolutely know you can trust. And never bite off more than you can chew. If you follow this advice, there's a good chance you can keep your "home sweet home."

Jack Tanner blogs about his experiences with home equity loans rate at http://www.homeequityloanszone.com Stop by and learn all the tips and tricks he's used over the years to take advantage of home equity loans.

Article Source: http://EzineArticles.com/?expert=Jack_Tanner

30 Year Home Loans

noreply@blogger.com (Rupert Hines III) — Wed, 15 Nov 2006 16:45:41 PST

It used to be the first choice of most borrowers, because since the total payments are spread over a longer period of time with the interest rate set for the entire time of the mortgage. 30 year home loan rates are an industry standard but is it the right choice for you?

The 30 year home loan is an industry standard, but is it the right choice for you? Because the total payments are spread over a longer period of time and the interest rate set for the entire time of the mortgage. This was the first choice of most home owners.

As we mentioned, the plus side for a 30 year home loan is lower monthly payments. This attraction is somewhat dimmed by the fact that you pay thousands extra in interest. But, your interest is 100% tax deductible which does lower your after tax cost. It offers you some flexibility so that if your financial situation changes and you have more money you can pay it off in less than 30 years, this while keeping the low monthly payments. Your payments are smaller so in reality you can purchase a larger roomier home.

To show an example of the interest difference between 30 year home loan rates and one of the other rates. On a 30 year, 100,000 dollar loan using 7% interest rate your monthly payment of interest and principle would be $665.30 dollars. Over the next 30 years you will have paid $139,511.04 in interest alone. Now with a 15 year home loan rate on the same amount you will pay $871.11 per month and over the next 15 years, you would pay $56,799 in interest. This would save you $82,712 dollars.

If you have the will power to invest the savings from the monthly payments, it still could be a good choice to go with the 30 year mortgage. Especially if you can find an investment that the long term payoff matches or exceeds what you would save in a 15 year mortgage. Another factor to consider is how fast you want to accrue equity in your home or to own it out right. 30 year home loan rates take much longer to build equity.

30 year home loan rates are certainly attractive and the vast majority of home buyers get 30-year loans because that is the longest home loan available today. Experts agree if they could get a 35- or 40-year loan, they probably would. There are many other options to consider. Probably the biggest question you have to ask yourself when considering a loan is what are your financial goals? What loan plan will help you the most to reach that goal? It is clearly to your advantage to look into other loan options for the best loan available for you and your financial goals. It may surprise you that because of your personal situation there may be other plans more suitable for you.

Home Equity Line of Credit-How to Avoid Five Traps

noreply@blogger.com (Rupert Hines III) — Wed, 15 Nov 2006 16:45:41 PST

by Mark Tern

If you need money and you are a home owner, a home equity line of credit (also known as "HELOC") could help you solve your problem. With this, you can borrow money against the equity in your home, i.e. the difference between your home value and your current mortgage debt.

As you are taking money against your home, asking for a home equity line of credit is a serious task; you must sure you are going to get a type of service which is fitting exactly with your needs. One of the main differences between different types of HELOC is about the interest rates you have to pay.

1) Cost of the application process

Some lenders offer home equity line of credits with a large one time fee. Others don't mention it but continue to add "underground" costs.

2) Low starting interest rate

Sometimes you could benefit of a low starting interest rate. This is for certain an attractive option, however you are warned to check how the rates are going to become just after the initial period. Usually they become much higher. How you can check it? Simply check the contract details, find exactly what is the financial base rate yours will be based to, ask where you can check it (usually the base rates are published on newspapers), and ask for projections of the base rate value for your home equity line of credit expected lending period. It's advisable also you ask for a second opinion to one of your preferred bank competitors.

3) Variable interest rates

Home equity lines of credit with variable interest rates computes the actual interests to be paid on a base rate defined in the contract you are signing. Usually this will be the interest rate set by the Federal Reserve Board.

As the interest rate varies, you can't predict exactly what you are going to give back in your next payment. This isn't necessarily a bad thing; however it could explode if you are not careful. Why? Give a look at the next two points.

4) Beware of balloon payments

Sometimes home equity line of credit lead to a so called "balloon payment", i.e. a big payment to be give back by the borrower after an initial credit period is expired. This could put in serious trouble (for more on the home equity line of credit balloon risk give a look at http://home-equity-loans.thesolution2.com/Main/Home-Equity-Loans-Heloc-Home-Equity-Lines-Of-Credit.php).

5) Beware of too high payments

Sometimes there is no balloon payment danger, but you have to pay each and every month a substantial payment. This could constraint you too much if your financial status requires more flexibility. Again, check how things are with your lender, and read carefully your contract. Clear what is the minimum payment you have to give back each month, so you can evaluate if it's sustainable by you.

Consider the alternatives to the home equity line of credit

This has always to be done, especially if the previous points and, most important, fuzzy answers from the lenders make things for you much harder. For example you could ask for a credit line that doesn't have your home as collateral; you could resort to your business or other properties you have; or you could opt for an income based loan.

If your only chance is to exploit your home equity but can't stand for the traps of home equity line of credit, then you could go for a home equity loan. It's less flexible but could be a lot safer for you.

To get started the proper way, get the Home Equity Loans Special Report you can find for free at http://home-equity-loans.thesolution2.com

About the Author
Mark Tern is the author of the Home Equity Loans Report you can get for free at his Home Equity Loans Website (link: http://home-equity-loans.thesolution2.com) where you can learn on how to exploit home equity loans for your best benefit. Check also his Home Equity Loans Blog.

Do You Need a Home Equity Loan or Line of Credit?

noreply@blogger.com (Rupert Hines III) — Wed, 15 Nov 2006 16:45:41 PST

by: Jakob Jelling

A home equity line of credit is very closely related to a home equity loan but the subtle differences can mean a lot. Determining which option is the best for you relies upon you knowing your current situation and having a clear plan for what you wish to accomplish with the money.

A home equity loan is a lot like a mortgage. With a home equity loan you are able to borrow the amount of your homes value that you have already paid off. The benefits of this type of loan is that it is almost always guaranteed since it is based upon the amount of your home that you already own, the terms are almost identical to a mortgage and you receive the entire amount of the loan up front after closing.

While a home equity loan is also based upon the amount of your home that you currently own, the terms of the loan are very different. A home equity loan is basically a credit card where the limit is the amount of equity that you have in our home. Instead of receiving one large lump sum of cash, you will receive an overdraft type of service on your account that will allow you to withdraw as much or as little of the equity that you wish to use.

Which choice is better for you? The answer depends upon what you need the money for. With a home equity loan the monthly repayment schedule is known and the interest on your loan will be lower than most other types of loans. However, with a home equity line of credit, you have instant access to cash and the payments will vary depending but the interest will vary. With this in mind the question really becomes do you need access to a varying amount of money or one known lump sum of cash?

A lump sum of cash with a set repayment schedule is great for specific things such as debt consolidation or the funding of specific projects with a predetermined cost. If you are considering debt consolidation for credit cards or any other high interest loans a home equity loan is most likely a very good idea. You will be able to repay all of your debt and will only have to make one monthly payment at a lower rate of interest that you are currently paying on your cards and other unsecured loans.

Home equity loans also make perfect sense if you know the exact amount that you need to borrow. While it is always nice to have cash on hand it is often better to have more credit available to you. The more of your credit limit that you use up the higher the interest rates will be for you and the tougher it will be to borrow more money in the event of an emergency. It is definitely to your advantage to only be in debt for a specific amount to complete one project.

A line of credit option may be better depending upon what you wish to do with your money. While you will still use up a portion of your credit limit, the payments and impacts on your available credit may be lower. With a line of credit you always have the same amount of money available to you. As you pay off the amount of credit used, you can reuse that portion if needed without having to apply for another loan. Also your payments may be considerably lower since you are only paying on the amount of money that you have actually used, not the total amount borrowed.

As you can see there are some big differences between a home equity loan and line of credit. If you are looking at a single project, such as a new car or adding a pool to your home, a home equity loan is the better choice for you. However, if you are looking at starting up a new business, wish to travel or can not settle on predetermined amount money, then a line of credit is the better option for you. With a line of credit you can use as much of your credit as you wish whenever you wish and, much like a credit card, you can reuse the amount of the line of credit that you have repaid with out having to re-apply for a loan.

About The Author

Jakob Jelling is the founder of http://www.cashbazar.com . Visit his website for the latest on personal finance, debt elimination, budgeting, credit cards and real estate.

Whatever You Do...Don't Save Money!

noreply@blogger.com (Rupert Hines III) — Wed, 15 Nov 2006 16:45:41 PST

by Leo J Quinn Jr

No, that's not a misprint. Even though falling interest rates are good when you want to get a loan, they are bad for people with savings accounts.

In this economy your best investment, the best place to put your money is into paying off debts. Think of it as investing in your debt because that is exactly what you are doing.

If you put $1,000 into a bank savings account earning 2%, at the end of a year you will have $1,020.

If you carry a $1,000 balance on a credit card with a 19% interest rate, and you pay the minimum monthly payments, at the end of one year you will have paid $190 in interest.

If you get $1,000 in a tax refund, small inheritance or from somewhere else you now have a choice to make. You can earn 20 bucks in a savings account or save $190 by paying off that credit card. Keep in mind that your 20 bucks is taxable income so you'll be left with $15 or so after taxes.

Do you need a savings account for emergencies? That savings account may be causing those emergencies! Think about it this way...

If you are earning money in a savings account at 2% and paying anything over 2% on your debts you are sliding backwards financially and you'll never get ahead. It's basic mathematics.

If you earn 20 bucks for five years in your savings account you'll have $100. If you pay $190 in interest on your $1,000 credit card after five years you will have paid $950 in interest charges.

In other words you have wasted, lost, burned or flushed $850 by having a savings account. ($950 - $100 = $850) OUCH!

What can you do? Pay off that credit card and use that as your emergency fund. It's not the best way to do it but it's better than earning 2% and paying anything over 2%.

So, while the stock market is on it's roller coaster and the economy is challenged your best investment, bar none, is your debts! Get them paid off!

About the Author

Leo J. Quinn, Jr. owner of www.LeoQuinn.com is a financial educator from the Albany, NY area. For over eight years he has been helping thousands of people get control of their finances and get out of debt in a fraction of the normal time. He has a special offer for readers of this newsletter at http://www.1shoppingcart.com/app/adtrack.asp?AdID=132551

Home Equity Loan Online – What To Do With Your Home’s Equity

noreply@blogger.com (Rupert Hines III) — Wed, 15 Nov 2006 16:45:41 PST

by Carrie Reeder

If you are wanting to get a home equity loan, rates are still low enough that you may want to make use of that equity in your home. Do you need some ideas on what you could do to multiply your equity or make some extra money off of the capital that could be available to you?

Here are some suggestions of ways to put the equity to good use when you go to take out a home equity or cash out refinance loan.

1. Do a home improvement that will increase the equity in your home more than the cost of doing the improvement. As an example, I have heard rumors that adding a deck to a home, because of the amount it increases the homes resale value, can add up to 4 times the cost of actually installing the deck.

2. If you have a low interest rate on your home, invest your equity in a low risk investment that has a much higher return on your money.

3. Buy an existing business or start a new business with the equity capital in your home. If you can start a low risk business, take the opportunity to let your equity work for you.

4. Use the equity as a down payment on an investment property or a rental.

5. Use it to consolidate high interest debt and possibly save yourself hundreds of dollars a month to put toward something else.

6. Use it to finance your education and increase your earning power.

7. If you live in an area zoned for this, you could finish a basement or area of the house to rent out. You could create a separate living space or apartment on your property.

Just be careful to not do anything risky with the equity in your home. If you can get a low enough rate, it may be worth taking that money and investing it somewhere else.

If you would like to view our recommended home equity loan lenders or get more information on home equity loans click here: www.abcloanguide.com/homeequityloan.shtml

About the Author

Carrie Reeder is the owner of www.abcloanguide.com. ABC Loan Guide is an informational loan website with informative articles and it has recommended lenders to help you get the best mortgage service possible.

Why Home Equity Loans are popular

noreply@blogger.com (Rupert Hines III) — Wed, 15 Nov 2006 16:45:41 PST

by Tony Forster

Why Home Equity Loans are popular

Home Equity Loan - An extremely popular and efficient way to borrow is using the roof over one's head as collateral for sizable amounts of credit. To define a few terms, equity is the difference between your home's appraised - or fair market - value and your outstanding mortgage balance. A loan refers to the amount of money you borrowed from a lender providing you with the mortgage. So basically, the idea with home equity loans is to borrow against your home's equity as a very effective way to get some things you need at a good price.

Why Home Equity Loans are popular

To be sure, borrowing against the value of a home has become increasingly popular. Why, you ask. There are two key reasons for this surge: low interest rates and tax deductibility.

The tax changes that occurred in 1986 have eliminated deductions for most consumer purchases. As a way to get around these changes in tax, consumers began borrowing up on their home value in order to make purchases. Home equity loans thus became a method adopted by homeowners to buy goods and still get a deduction.

For instance, let's say that you bought your home for $95,000 and made a 20 percent down payment of $19,000. To pay the remaining $76,000, you then took a first mortgage. On the day you closed on your home, you automatically had 20 percent equity. As you pay off the principal, you gain equity and your home grows in value.

Now, let's say that you have paid $12,000 toward the principal and your property. Remember that you property was valued at $95,000 when you bought it. Now, since you have made the payment on your principal, your $95,000-home is now worth $115,000. Your beginning equity ($19,000), plus the principal you have paid ($12,000) and the increase in your property value ($20,000) gives you $51,000 in equity.

Home Equity Loans: Equity as a Valuable Asset

Banks and borrowers both benefit from home equity loans. The reason for this is that equity is a valuable asset to have. You can put it to use without having to sell your home. And because most people's domicile is their biggest asset, lenders regard home equity loans as secure. For that reason, interest rates for home equity loans are lower than for other loans.

Who are the best borrowers of Home Equity Loans?

Earlier in the article, we have made mention that home equity loans are beneficial to both the lender and the borrower. However, like all things, home equity loans also have their downsides. The disadvantage to home equity loans is that if you default on the loan, the lender could foreclose on your home. For this reason, home equity loans are statistically most suited to stable, middle-aged borrowers.

About the Author

Tony Forster has a keen interest in living debt free having been "up to his ears" before I realized the need to take control. I am compiling a useful online resource at http://www.loan4payday.info enabling anyone to find the perfect money managment for them.