Know the Facts About a Home Equity Loan

home equity loan

A home equity loan permits a homeowner to secure funds by accessing the equity within their property. The proceeds of this loan can be used in any manner the homeowner chooses, such as to pay off debt or for home improvements. The amount available is determined by the equity that has been vested in the property due to mortgage payments and home appreciation. A home equity loan is a secured debt, and the lender may call the loan due in full at any time, but customarily only under dire circumstances.

Home equity line of credit vs. Home equity loan

home equity line

A home equity loan is acquired in two distinct manners. A homeowner may opt to obtain one lump sum payment or can request a home equity line of credit in which the homeowner draws available funds as they are needed. Generally speaking a home equity loan is tied with fixed rate mortgage terms, while a HELOC is times to adjustable rate mortgage terms. The funds received from either types of loan can be used at the homeowners discretion. Common uses for these types of loans include home repair and improvement, debt consolidation, college tuition and/or medical bills. A home equity loan is also beneficial to have in case of emergency.

Home Equity Loans Provide Tax Benefits

tax benefits

The home equity loan benefits the homeowner at tax time. Generally, the home equity loan rate is tax deductible if used for purposes provided in under tax guidelines. To determine what your loan will cost you, it is wise to utilize a home equity loan calculator found on the Internet, or can be discussed with any of the lenders you are considering. When shopping for home equity loan rates, be certain that you enter into negotiations with lenders that offer the lowest home equity rate on the market. This will save you many dollars over the life of the home equity loan.

Additional information on home equity loans and rates

additional information

If you are seeking home equity loan rates, first determine the amount of equity you have in your home as well as your homes current market value. It is easier to qualify for a home equity loan if there is a substantial amount of equity present. A home equity loan can bring a great relief in times of financial distress so it behooves you to be as informed as possible. Check out your home equity loan options with a variety of lenders to make a well qualified, educated decision.


News & Events