HOME EQUITY LOANS
What They Are; Do You Need One? How To Get One If You Do
You are a homeowner and have been faithfully making those mortgage payments for several years now. You've paid down your loan by several thousand dollars, and at the same time the value of your home has increased quite a bit. Now you find you need some money to take care of some financial needs: Your house needs a new roof or carpeting or you want to remodel; perhaps you want to buy a second home, have unexpected medical bills, or you decide to consolidate all of your bills. Should you tap into the equity in your home to take care of this new expense? Read on for more information.
Equity is the difference in the value of your home versus what you owe on it. You can take out a Home Equity Loan using the equity in your home as collateral against the loan. Because of the collateral, Home Equity loans are usually easy to get. They are offered by many banks, Bank of America, Washington Mutual, Chase and Wells Fargo to name a few.
Mortgage Companies Specializing in Home Equity Loans
Countrywide Home Loans: Offers Home equity and variable rate loans, works with self-employed or commissioned borrowers, less than perfect credit. Apply online or through a toll free number.
Ditech:Ditech.com is a part of the GMAC Financial Services family of companies.. Freedom Loan lets you borrow up to 125% of your home's value. Lost another loan to Ditech?
Ameriquest: Online application, you will be contacted the next business day by a mortgage specialist.
E-Loan: Home Equity loans, as well as refinance and original mortgages. Online application available or call toll free number.
Paramount Equity Mortgage: Processes Home equity loans as well as first mortgages and refinance, apply online.
Lending Tree: Home equity loans, first mortgage, refinance, and other types of loans. Apply online.
Should I, Or Shouldn't I?
We don't recommend taking out a loan against the equity in your home unless you have very good reasons and can afford the extra payments. Remodeling or home repairs, investing in a vacation home or second home may be good enough reasons. Debt consolidation may not be a wise use of these funds, unless you can be firm with your spending habits so that you don't find yourself with high credit card debt again. If you have private student loan debt, a home equity loan may give you a lower interest rate, so this would be something else to consider. A luxury vacation may not be wise. The important thing is to study everything carefully before committing yourself to more debt.
The Different Home Equity Loan Types
There are two basic types of Home Equity Loan: a "Closed End" equity loan and an "Open End" loan. The Closed End sets the loan amount at closing, no more can be added to the loan. The amount of the loan will sometimes be more than you need, so if you are going to make use of this type of loan, it's best to determine ahead of time how much you need, so the borrowed amount doesn't exceed this by too much. Useful when you know the amount of money you actually need ahead of time, as in buying a second home or paying off student loans or medical bills. The Open End Loan is more like a line of credit. This type of loan may be most useful if you are making home improvements or remodeling, as the specific amount you need may not be known ahead of time.
The most valuable asset you may have is your home. Be careful when putting this asset on the line, by thorough research of the financing and prudent use of the funds.
Irrespective of the person or organization from which you decide to obtain the home loan you should make sure that whether he is a member of mortgage association or not. Home loan is a type of secured loan which means that you put your home as a security against the money you obtain. Nowadays banks are considered as traditional lenders. Banks offer loans through their accredited mortgage brokers. Mortgage brokers offer different types of products like home loans and auto finance. Issuing of credit card is considered as the major earning source for these brokers.