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Home Equity Loans Article
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What is a Fixed Rate Home Equity Loan?
from: Maxx Home GuidesAre you in need of a large amount of money to help out with a family member's college education, or a major purchase such as a boat, or for a home improvement project? These are the types of expenses that require a large sum of money and many people decide to borrow agains the equity in their home to raise the required funds. If you've owned your home for a number of years, it's likely you've built up a good amount of equity, which is the difference between the balance you owe on your mortgage and the current market value of your home. This equity is an ideal way to raise funds when a specific financial need arises.
A home equity loan is excellent if your income is stable and you know you'll have no problems handling the extra monthly payments. A fixed rate home equity loan provides you with the full amount immediately upon being approved for the loan and you pay it back with equal monthly payments over a specific term that best suits your budget. What's important to understand about a fixed rated home equity loan is your monthly payments remain stable and predictable throughout the term so you will always know how much to budget for.
This type of loan is available in just about any term you require, ranging from 5 to 30 years. The shorter the term you choose, the less you'll pay in interest, however, your monthly payments will be higher as well. On a fixed rate home equity loan, the longer the term the higher the interest, however, the rate remains the same throughout the term of the loan. However, you can also consider a variable rate home equity loan, which means the rate will fluctuate with the Prime Rate. If the Prime Rate decreases when your comes up for renewal, then your equity loan rate will also decreases. If the Prime Rate goes up, so will your equity loan rate.
It's best to choose a fixed rate home equity loan if you need use of the cash one time use only. Some of the advantages of fixed rate home equity loans is the tax deduction of up to $100, 000, your interest rate is fixed, and you will be able to borrow up to 125 % of the current market value of your home. It may be tempting to go for the maximum amount, but make sure you understand that your home is at risk if, at some point, you're unable to make your monthly payments.
If you're applying for a fixed rate home equity loan for an important purchase, it's advisable to borrow the specific amount you'll need so you're not tied up with loan any longer than you need to be and thus there's less chance you'll have to worry about losing your home.
The disadvantage of a fixed home equity loan might be that the interest rates is going to be higher than a home equity line of credit, or fixed end loan -- which means you can’t keep borrowing the funds as you need them plus it may be more difficult to qualify for this type of loan.
Do your research first, because each type of home equity loan has pros and cons so you're going to have to determine which is best for you before you decide. You should also shop around and get the best offer you can from several lenders so you can choose the one with the lowest interest rate and terms that best suit your needs.
Home Equity Loans News
Budget Relief in Sight for Homeowners as Innovative Way to Tap ... - MarketWatch
Budget Relief in Sight for Homeowners as Innovative Way to Tap ... MarketWatch - Using the REX Agreement, REX & Co. allows homeowners to convert their home equity into cash with no additional debt, no interest, and no monthly payments in ... |
Homeowners left in the lurch - San Diego Union Tribune
 San Diego Union Tribune | Homeowners left in the lurch San Diego Union Tribune, United States - By Emmet Pierce When he took out a $206000 home-equity line of credit in 2007, Kevin Hall thought he'd secured all the funding he'd ever need for a major ... |
FDIC Restructuring Some IndyMac Loans - Washington Post
 Boston Globe | FDIC Restructuring Some IndyMac Loans Washington Post, United States - The program focuses on modifying the homeowner's first lien -- the primary mortgage that does not include a home-equity line or another type of second loan. ... Outrage, Indifference Over FDIC’s ‘Bailout’ Plan Regulator Will Help Borrowers at IndyMac |
Loans for college students harder to come by - Arizona Republic
Loans for college students harder to come by Arizona Republic, AZ - For starters, tighter lending standards and falling housing prices have made it harder for parents to tap home-equity loans and lines of credit to pay their ... Problems of getting private aid increase |
Home improvement won't improve quickly - MarketWatch
Home improvement won't improve quickly MarketWatch - Once upon a time -- say, in 2005 -- almost anyone could borrow $50000 against the equity in their home. But now, banks are curbing home-equity loans and ... |
Zell Opts for Debt Investing, Awaits Housing Rebound (Update1) - Bloomberg
Zell Opts for Debt Investing, Awaits Housing Rebound (Update1) Bloomberg - Zell sold Equity Office Properties Trust, then the biggest US commercial landlord, for $39 billion to Blackstone Group LP in 2007 and isn't yet ready to ... |