Home Equity Loans Make Financial Sense

The optimum word in "home equity loan" is equity. Start with the fair market value of a home, subtract the mortgages (first and second) and any liens against the property, and what you have left is the equity. This equity can be used as collateral to secure cash in the form of a loan or mortgage.

The amount borrowed is based on a percentage of the appraised value of the home. The percentage rate can vary from 75% to 125%. The length of the financing will also vary. The two main types of home equity loans are fixed rate loans and adjustable rate loans.

Fixed rate loan - provides a fixed amount of money at a fixed rate of interest, repayable in equal payments over the life of the loan. Fixed rate financing costs more in set-up fees and comes at higher interest than adjustable rate loans. But if homeowners stay put and interest rates go up, they will save money over a comparable adjustable rate loan.

Adjustable rate loan - the interest rate goes up or down according to the index upon which it is based. Adjustable rate loans will have a cap on how high the interest rate can go. Usually called ARMs (Adjustable Rate Mortgages), this type of loan has lower up-front costs and starts at a lower interest rate than fixed rate financing. This means lower initial monthly payments.

Putting home equity to good use
According to the Consumer Banker Association, the top ten reasons for getting a home equity loan are:

10. Vacation
9. Medical expenses
8. Business expenses
7. Household expenditures
6. Investment
5. Major purchase
4. Education expenses
3. Automobile purchase
2. Home improvement
1. Debt consolidation

Debt consolidation, the most popular reason people cash out their home equity, is a smart form of financing because of the money it can save. For example, say you owe $15,000 on a credit card that charges 17% interest. If you get a debt consolidation loan at 9% interest and pay it off in five years, you'll save you over $30,000!

If you're paying more than 15% interest on anything, you should seriously consider a debt consolidation loan. The right terms could drop your monthly payments by 35% - 50%, depending on interest rates, origination costs and tax consequences.

Even for people who have bad credit or who have filed for bankruptcy, a home equity loan is not out of reach. It can be a good way to make a fresh start. Websites like www.easyhomeequitymortgages.com help borrowers with bad credit get the home equity loan that best fits their unique situation.

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Housing Grants and Home Improvement Programs

ASHINGTON, D. C. — U. S. Sen. Richard C. Shelby (R-Ala.) today commented on the Senate’s passage of S. 811, “the American Dream Down payment Act.” The bill authorizes $200 million in grant assistance each of the next four years to low-income, first-time homebuyers.

The grants will be administered through the Department of Housing and Urban Affairs. Senator Shelby said, “One of the many obstacles to achieving homeownership is putting together the money for a down payment. This is especially true for low-income, first time homebuyers. This legislation will help many families that would not otherwise have the opportunity to own a home.”

“I would especially like to thank Sen. Allard for his leadership in introducing this proposal. He has been instrumental in sheparding it through the Committee and the Senate. Sen. Allard truly understands the significance of helping hard working families achieve a piece of the American dream.”

At the current funding level, the program would provide $2.86 million a year for down payment assistance. This would translate to about 570 families achieving homeownership per year under the program.

Billions of dollars are also available to help American citizens purchase homes, rental property, and many other real estate projects. it's part of a joint government and banking initiative to revitalize the economy by making loans more accessible to people previously rejected as a poor credit risk.

Now is the perfect time to start looking for your dream home.

nterest rates are at an all-time 40 year low.

You can obtain the latest information on these and many new programs as well as existing free government grants and loan sources.

If you need money to purchase a home, low interest loans and down payment assistance is now available to you, regardless of your income or past credit history.

Home Equity Loans from Home Loan Special

You might hear about home equity loans, but have never thought about getting one for yourself. The truth is, home equity loans have low interest rates, are tax deductible and are always growing over time, which makes home equity loans a very valuable asset for your home and great for emergency borrowing. If you are in need for one of these great loans, you have come to the right place. Apply now, at Home Loan Special!

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Who Can Get a Home Equity Loan?

Not everyone one can just go out and get a home equity loan. There is a process and requirements in which you must follow to ensure your reception of a home equity loan.

First of all you will have to meet these requirements:

• You must have a home that is mortgaged in which you acquire equity
• You must be of 18 years of age or older
• You must have a good credit standing
• You must have a regular source of income

What Are the Advantages of a Home Equity Loan?

You can use your home equity in multiple ways. It is a diverse loan and also a relatively safe loan. A home equity loan is a secured loan, which is guaranteed by your house's equity. It offers you lower rates that most other loans and very flexible terms such as the ability to choose between adjustable or fixed rates of interest.

The amount of money that you receive from your lender can be used any thing you wish. There are no restrictions on what you can spend your home equity on or how you spend it. You can even buy your dream car with it!

A common way to send your home equity loan is to use it for paying off, if not all, previous debts and help stabilize your finical situation. You can even invest some of your home equity loan into other products as well.

Home equity loans have great tax benefits along with low interest rates.

The home loan application process is hassle free and fast since a home equity loan is secured and provided by your home's equity.

HOME EQUITY LOAN

In need for a fast home equity loan? How about trying one of our many competent offers in low rate home equity loan?

You’ll be surprised to experience how easy it is to raise a home equity loan with us. Almost none waiting time, and highly experienced home equity loan qualified employees. Our friendly employees will also be more than happy to tell you more about your options with a home equity loan, and they’ll do their best to support you in understanding all terms of the home equity loan.

House improvements, debt consolidation, and repairs – you name it, and we’ll be the best choice for a home equity loan. Raise a home equity loan today and experience high quality service as well as thorough consulting forwarding your home equity loan.

So, if you’re in search for the most rational home equity loan, suited for you as an individual customer and with low monthly payments, then take yourself five minutes to read more about our home equity loan and what other offers we’ll be able to make you.

Know about Home Equity Loans

When we consider taking up a loan for building or buying a house the common type of loan available is a secured home loan. The secured home loan can be secured in two ways either the house which is being bought with the loan will be used as security in which case the loan will be called a mortgage or in the second case the house being bought by the loan will not be the security of the loan instead some other collateral like a real estate or piece of land will secure the loan. Secured loans that are called mortgage are given on a house or a car usually.

The value of the loan is determined by looking at the value of the house. The value of the loan will never equal the value of the house. A gap between the values will always exist to secure the lender against any rate changes or default on the loan. The gap between the value of the house and the value of the mortgagee is called the equity of the house. Home equity can be taken out of the house and can be applied for any purpose such as paying college tuition, paying medical bills or any other similar expense. A home equity loan is generated as the second degree loan and it is the loan or the mortgage that replaces the old deal of mortgagee on the house freeing the equity in the form of cash. In order to get the home equity freed the home owner has to apply for the home loan refinance which will then generate a new home equity credit. Home equity credit is different from home equity loan.

The person applying for refinance can also opt for cash out refinance by virtue of which the home owner will be paid the equity of his house in cash and the new home equity loans are generated in this manner. The new loan that is created puts the house in the hands of the lender as a lien. Home equity rates are lower then the rates that were previously applicable on the loan. In order to qualify for a home equity mortgage the person has to show an excellent credit history and the credit rating has to be either flawless or something close to flawless.

As explained in order to get a low home equity loan or one with a low interest applicable a borrower will have to give proof of flawless or extremely good credit rating as this is the factor that is considered by the lender first and foremost. The rates that will apply to the loan will depend on the credit rating and hence; a person with a bad credit rating will only be eligible to get bad credit home equity.

In a home equity loan credit the person takes up a new loan and the equity of the house is used as collateral. The home equity line or the home equity credit line can help in paying for the house repairs which are an investment in the house after all. It is better to choose this method then considering the method of taking another loan to finance the home repairs. In this way the house pays itself for its uplifting. The home equity of the house is reduced once the home equity line of credit is issued. Also a lien is created against the house on which the loan is taken and out of the house which gives out the equity. Such loans are considered as second position liens. The loan that is taken by keeping the house as collateral is the first hand loan and is then replaced by a loan that is negotiated on better and lower equity loan rate. There are two types of equity loans open end and closed end.

Closed End Home Equity Loan

On these loans the borrower receives a lump sum at the time of loan deal closing. The borrower is not allowed to borrow any money further as it is not possible. The amount of money that can be borrowed by the borrower can be calculated using factors like his credit rating, value of the house being used as collateral and other such factors. Although most lenders will take the amount of liens out of your home equity and then lend the rest of the money to you but some people lend amounts that are over the value of the house. These loans are called over equity loans. These loans are not very common and lenders who deal in such loans can only rarely be found. In some states the state government imposes restrictions on how much equity of the house can be loaned out. The pay back period of these closed ends home equity credit can be spread over up to 15 years and this period is usually smaller then the original period of the mortgage payback. The home equity rate applicable to these loans is a fixed interest rate. Some deals of pay back end in a balloon payment and if you can not pay the money back in a huge sum then it is better to pay over the monthly installments or to get your loan refinanced to avoid defaulting at the last minute.

Open End Home Equity Loan

In the open end home equity loans you are offered a line of credit by the lender. This line of credit is available to the borrower equal to the 100% value of the house just like in close end loans. But the money can not only be taken out once. The borrower can continue to take money out when ever he needs it for 30 years. These lines of credit are available on a variable home equity loan rate. There is a margin included in the rate that is determined along with the prime rate that is the major determinant of the rate. The minimum that a person may have to pay monthly could be equal to just the interest due.