Home Equity Loan: What You Need to Know
Written by: Jay Moncliff
The idea of getting a home equity loan while interest rates are low to help you pay off your bills, buy a car, or even pay for your child's education may seem like a great idea. However, you should educate yourself first so you know exactly what a home equity loan is and if it is really right for you.
The basic idea of a home equity loan is that you can borrow against the current equity in your home, so the more equity you have the larger home equity loan you can receive. In essence, to receive a home equity loan you are using your home as collateral, or the basis, for the home equity loan. If you do not pay the home equity loan back, then your home is at stake and may be foreclosed upon. This is sobering news many people are not aware of, so getting a home equity loan requires some thought and the ability to repay the home equity loan as well.
However, you might be reading this and actually interested in a home equity loan, but have no idea what equity is or if you have any. Equity is how much of your home you have paid for. So, you take the home's current value and subtract it from the amount you still owe, and that is how much equity you have in your home and what will ultimately be used to approve or deny your home equity loan application. For example, your home is currently worth $400,000 and you have $280,000 left to pay on your mortgage. Your current equity is $120,000.
You will need to know all of this information before you apply for a home equity loan to know if you have enough equity to even apply for a home equity loan. Plus, the more you know about applying for and negotiating rates for a home equity loan the better deal you will receive. Remember, knowledge is power and the more home equity loan knowledge you have the more powerful you will be able to negotiate.
About the Author
Jay Moncliff is the founder of http://www.loansreviews.info a website specialized on Loan, resources and articles. This site provides updated information on Loan. For more
info visit his site: Loan
Personal Loans for Personal Needs
People generally have a tendency to spend more than what they
earn. This tendency to overspend has become very common in the
UK. Rise in consumerism and an urge to have a better standard of
living have contributed to overspending. When you...read more
Business Loans for Women
The Small Business Administration states that business loans for
women are on the rise, and will continue to be needed on an
increasing basis in coming years. Business loans for women are
more popular than ever due to a variety of factors.
Refi Home Mortgage Loans - How Soon Can You Refinance An Adjustable Rate Mortgage?
Homebuyers have several loan options. Hence, purchasing a new
home has never been easier. Individuals who cannot afford a down
payment or closing costs may take advantage of loan programs
that offer assistance. Furthermore, those hoping to obtain...read more
Return to Home