Which Loan is Best For You-A Home Equity Loan or a Home Equity Line of Credit?
Tip! Having home improvements is the most recommended reasons to get a home equity loan because it does not only increases the value of your home, it also makes you feel a lot better about your home and it will also make your home look great. When you use a home equity loan you can reinvest it back to your home by increasing the value of your home.
If you don't know the difference between a home equity loan and a home equity line of credit, here's a quick summary of both with their advantages and disadvantages.
A home equity loan is a fixed loan taken out over a fixed period of time and at a fixed rate. The monthly repayments are also fixed for the term of the loan so you know from month to month what you're paying back.
The advantages of this loan are…
• That unlike your primary mortgage this loan is paid off over a shorter period of time, it varies between 5 - 30 years. • You can't borrow more than the amount you have agreed so you can't get further in debt.
The disadvantages of this loan are…
• You may get carried away and may borrow a little more than you really need to. • You can remain in debt by taking out an interest only home equity loan and not paying off the principal amount.
A home equity line of credit can be compared to a credit card; the lender offers you a fixed amount you can borrow up to in a certain time limit. These time limits can vary from lender to lender. You get a fixed period of time you can borrow for and then a fixed period you to pay off your loan.
The advantages of this loan are…
• You don't ever need to borrow the full amount offered. • You can pay off the full amount and if you are still within the borrowing time limit, you can borrow the same amount out again. • It's more flexible than a home equity loan.
Tip! Some lenders of home equity loans offer low introductory rates that might look like a great deal but these deals usually revert automatically to higher home equity loan interest rates.
The disadvantages of this loan are…
• You are never on a fixed interest rate, your repayments vary from month to month. • Some lenders require a small up front payment before using the loan • You may only be able to borrow a minimum amount each time and have a minimum remain balance.
And finally, as with all loans, always be on the lookout for the best deals and make sure you can afford it before taking either loan out.
For more free home equity loan advice and information visit http://www.allabouthomeequity.com for details.
Home Equity News:
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Home equity loans drying up for some - Personal finance- msnbc.com
Some homeowners are finding that even with great credit and 20 percent or more home equity, getting a line of credit on that equity can be difficult or impossible.
Equity in Americans? homes falls to historic low - Mortgage Mess ...
The equity Americans have in their most important asset ? their homes ? has dropped to its lowest level since the end of World War II.
Use of home equity hits a four-year low - Real estate- msnbc.com
The amount of money Americans pulled out of their homes is at a four-year low as homeowners battle falling home values and stricter standards among lenders, Freddie Mac said ...
Morgan Stanley to freeze home-equity lines - Mortgage Mess- msnbc.com
Morgan Stanley told thousands of clients this week that they will not be allowed to withdraw money on their home-equity credit lines, according to a news report.
Late payments for home equity loans rise - Real estate- msnbc.com
Late payments on home equity loans climbed to a 1˝-year high in the opening quarter of this year, while delinquencies on credit card bills fell, painting a mixed picture of how ...
Late payments rise on home-equity loans - Stocks & economy- msnbc.com
Late payments on certain auto and home equity loans climbed in the final quarter of last year, while delinquencies on credit card bills largely held steady, suggesting some U.S ...
BofA tackling debt worries by cutting home-equity lines - Top Stories ...
Bank of America Corp. is tightening up its home-equity lending business, turning down applications and turning off credit lines in struggling housing markets.
Should I get a home equity credit line? - Answer desk- msnbc.com
Free money In this week's video Answer Desk, msnbc.com's John W. Schoen has some advice on how to avoid giving the government more of your money than you need to.
Morgan Stanley to freeze home-equity lines - Today Technology & Money ...
Morgan Stanley told thousands of clients this week that they will not be allowed to withdraw money on their home-equity credit lines, according to a news report. ... Morgan Stanley ...
The New Yorker: When owning isn?t better - The New Yorker- msnbc.com
The housing boom undoubtedly makes lots of first-time home buyers happy. Unfortunately, it may end up prolonging the current downturn. By The New Yorker's James Surowiecki.
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