HOME EQUITY LOANS

A Home Equity Loan allows a homeowner to borrow money by leveraging their equity, or the amount of money they have invested into owning their home. 

A Home Equity Loan can be either a fixed rate mortgage or an adjustable rate mortgage, and can be acquired as a lump sum or used as a revolving line of credit. Debt consolidation, home repairs, medical bills, and big expenses like a child's college tuition are all good reasons to consider applying for a Home Equity Loan. Unlike other forms of consumer credit such as auto loans or credit cards, the interest on a Home Equity Loan is usually tax-deductible when used for its primary purposes. To find out more about how a Home Equity Loan could eliminate your financial problems, fill out the form below.

Uses Of Home Equity Loans: The three most popular uses of home equity loans are:

1. Home improvements: Many homeowners access their home equity to pay for remodels and other home improvements — everything from a new kitchen or bathroom to a series of repairs and upgrades.

2. Consolidate bills: You can also use your home equity to combine all of your high-interest bills into a single, more manageable monthly payment. You can increase your cash flow by lowering your monthly payment and — since it’s easier to keep track of just one bill — more effectively manage your finances. 

3. Big purchases or expenses: Lower rates and potentially tax-deductible interest can make home equity financing a less expensive option than a traditional loan. So a home equity line of credit or loan is also a good way to finance large purchases or expenses such as a new car, college tuition or other education expenses, medical expenses, a life event (wedding, baby, retirement), taxes & investment opportunities.

Types Of Home-Equity Loans: There are 2 basic types of home equity loan:

1. Standard Home Equity Loan (SHEL): They are fixed-rate loan, & provide a single, lump-sum payment to the borrower, which is repaid over a set period of time at an agreed-upon interest rate. The payment and interest rate remain the same over the lifetime of the loan.

2. Home Equity Line Of Credit (HELOC): They are variable-rate loan that works much like a credit card and, in fact, sometimes comes with one. Borrowers are pre-approved for a certain spending limit and can withdraw money when they need it via a credit card or special checks. Monthly payments vary based on the amount of money borrowed and the current interest rate. Like fixed-rate loans, the HELOC has a set term. When the end of the term is reached, the outstanding loan amount must be repaid in full.

Advantages Off Home Equity Loans: Home equity loans are attractive to borrowers for a few main reasons: 

• They typically have a lower interest rate
• They are easier to qualify for if you have bad credit
• Payments on a home equity loan may be tax deductible
• Borrowers can get relatively large loans with this type of loan