| You probably already know that a Home Equity Loan | | | | costs. |
| is a great way for home owners to get cash fast for | | | | Pay Private Mortgage Insurance (PMI). |
| things like college funds, debt payments and other | | | | PMI is required on most mortgages where the down |
| expenses. But what if you don't have any equity in | | | | payment is less than 20% of the home's value. If you |
| your home? Sounds odd, but it's possible, especially if | | | | get a Home Equity Loan without any equity in your |
| home values have recently dropped or you have a | | | | house, you'll have to pay PMI, too. The amount varies, |
| second mortgage on your property. Fortunately, it's | | | | depending on your lender, your home's value and other |
| possible to still get approved for a Home Equity Loan. | | | | circumstances. However, it can easily tack on |
| However, you'll probably have to: | | | | anywhere from $50 to $120 to your monthly payment. |
| Pay higher interest rates and fees. | | | | And you won't be able to drop PMI until you have 20% |
| For the most part, expect to pay significantly higher | | | | equity in your home. |
| interest on these types of Home Equity Loans. In | | | | Skip tax breaks. |
| many cases, the interest can be up to 6% higher than | | | | In most states, Home Equity loan interest is tax |
| a typical Home Equity Loan, though it's possible you'll | | | | deductible--any interest you pay during the year can |
| only have to pay 2% or so more. Moreover, you'll pay | | | | be deducted on that year's taxes. However, because |
| higher closing costs and other fees when it's time for | | | | of the nature of these types of Home Equity loans, |
| payout. How much you'll pay depends on your | | | | chances are you won't be able to take this tax |
| personal situation--the lender, your credit history, your | | | | deduction on April 15. |
| income, etc. But overall, expect to have much higher | | | | |