| Working as a financial consultant, I get hundreds of | | | | What use can the borrower give to the money? Well, |
| emails and calls everyday inquiring about many | | | | that is the beauty of this type of loan. You can do |
| different financial products. I have noticed that home | | | | anything, the world is your oyster! Whether you need |
| equity loans are a very common source of doubt for | | | | to remodel your house, add rooms to it, go away on a |
| my customers. As regards home equity lines of credit... | | | | long vacation, purchase a used or new car, or even |
| well, let us just say that great many people do not | | | | acquire a second property, home equity loans can help |
| even know of their existence. It is a real pity that these | | | | you in so doing. There is no limit to what you can do, |
| products are not better known because they are | | | | only your imagination. |
| incredibly versatile as they can be used for many | | | | Repayment plans range from 5 to 20 years, and as |
| different purposes. They are also very cheap sources | | | | you might have noticed, they are somewhat shorter |
| of finance. | | | | than the repayment plans on mortgage loans. |
| That is why I decided to write an article on the basic | | | | Home Equity Lines Of Credit |
| concepts of both of these fantastic financial products. | | | | This credit is also know as an open-end home equity |
| Home Equity Loan | | | | loan. It is also a loan based on the equity on your |
| Home equity loans are usually referred to as second | | | | home, but it has one major difference: you decide how |
| mortgages, because they are secured against the | | | | much and how often to withdraw funds. The lender |
| value of the house. The borrower uses the equity on | | | | sets a limit on how much can be withdrawn, but once |
| his property as a collateral for the loan. So... what does | | | | this amount is repaid, the borrower can take out funds |
| equity mean? Equity is the different between the | | | | again, and so on. |
| property's market value and the remaining balance of | | | | Lines of credit based on equity are perfect for you if |
| the mortgage and any owed debts related to the | | | | your monthly income is variable (as often happens with |
| property. If you have finished paying the mortgage on | | | | self-employed people). There is a minimum monthly |
| your home (or never applied for one), then the equity | | | | payment which consists of the interest rate if you |
| on your home is 100% of the real value. If you have | | | | have not withdrawn any funds. |
| already paid 40% of the home, then the equity will be | | | | If what you are looking for is flexibility, then a line of |
| worth 40% of the real value of the property. | | | | credit will be just perfect for you. No fixed monthly |
| Loans based on the equity on your home are | | | | payments, instant availability of funds at your best |
| marvellous. They are granted almost to any home | | | | convenience, among other advantages. |
| owner and their terms are usually extremely | | | | Now you are fully aware of what these two equity |
| favourable. Not only are the interest rates very low, | | | | based credit products have to offer, it is up to you to |
| but they are also deductible! | | | | choose the one which best meets your requirements. |