| Home Equity Loans | | | | value of your emergency fund has fallen. No need to |
| Unlike your first mortgage, you are already in the | | | | panic, of course. But because interest rates change |
| home, and usually time is not such a major factor. You | | | | constantly, what may have seemed like a good rate |
| can close the loan at your own leisure, and take your | | | | when you first purchased your home may be much |
| time researching the different options available to you. | | | | higher than today's rates. If you choose to refinance to |
| A mortgage lender will have a range of loans to suit | | | | take advantage of the new rates, you will have to |
| you. Some homeowners opt to refinance an existing | | | | take out a new mortgage with a lower rate or more |
| mortgage and use the cash obtained at closing to | | | | favorable terms, and use it to pay off your old loan. |
| reduce debts. | | | | Interest is the largest single cost associated with most |
| Essentially, a home equity loan is a 'second mortgage' - | | | | equity loans, but it is not the only expense borrowers |
| a loan secured by your property. If you don't make | | | | face. Taking out a home-equity loan or a home-equity |
| good on your payments, the lending company or bank | | | | line of credit imposes the same fees as a mortgage . |
| can force the sale of your house to recover their | | | | Interest rates for loans differ, so it pays to check with |
| money. | | | | several lenders for the lowest rate. Compare the |
| The money is paid back through an increased | | | | annual percentage rate (APR), which indicates the |
| mortgage payment. Plus, it is an online application, not a | | | | cost of credit on a yearly basis. Interest is charged on |
| paper application that has to be picked up and then | | | | a predetermined variable rate, which is usually based |
| turned back in to the bank or mortgage company. | | | | on prevailing prime rates. |
| Search for quotes from top local mortgage companies | | | | Interest rates on such loans are usually adjustable |
| based on your needs and choose the best broker to | | | | rather than fixed and lower than standard second |
| help you through the loan application process. | | | | mortgages or credit cards. Interest on both a home |
| Mortgage calculators help borrowers understand | | | | equity loan and line of credit may be deductible (consult |
| monthly payments and let you compare rates | | | | your tax advisor about your personal situation). Interest |
| between multiple mortgage products nationwide. | | | | rates, fees, repayment conditions, loan amount, and |
| Terms, rates, and fees are subject to change without | | | | additional costs such as points can all vary. For |
| notice, prior to closing your fixed-rate conversion. | | | | example, a lender may charge an annual fee for using |
| Certain restrictions and documentation requirements | | | | your home equity line of credit or even a larger fee if |
| may apply. | | | | your credit line is inactive. |
| Understanding the difference between home equity | | | | Interest rates on home equity loans are generally fixed |
| loans and home equity line of credit ... | | | | for the loan period. On the other hand, the home equity |
| Line of Credit | | | | line of credit provides more flexible terms of use. |
| And unlike a home equity loan, with a line of credit you | | | | Interest paid on a home equity line of credit is normally |
| pay interest only when you use your funds. You're | | | | tax deductible. Interest rates lately are near record |
| drawing on a home equity line of credit on which the | | | | lows. If you bought your home a few years ago you |
| interest meter is ticking, while at the same time the | | | | may well be able to refinance at a lower rate. |