| Home Equity Mortgage |
You can get a
home equity mortgage against the equity you have built up in your home. A home equity mortgage loan is provided in lump sum, while a home equity line of credit (HELOC) is open-ended, and may be provided for a longer period of time.
If you get a HELOC, you can withdraw the money as and when you need it and can keep repaying it at your convenience. The money will become available for withdrawal again as soon as you repay it, until the expiry date is reached.
Home equity loans and HELOCs are also known as
second mortgages. They are provided in addition to the first mortgages and they are usually repaid after the first mortgages in case there is a default.
Home equity mortgages may have lower interest rates than other types of loans, and the interest is usually tax deductible. You need to have a good credit score to qualify for a home equity loan mortgage.
You can get a home equity loan to raise money for any purpose, but you need to remember that you are using your home as collateral. If you are not able to keep up with the payments, you will lose your home.
A home equity loan should only be taken to raise money for essential expenses, and you need to be sure that you can afford the monthly payments.
It may make sense to get home equity loans for meeting medical expenses, financing your own or your child’s education, or for paying off high-interest debts. Think twice before getting a home equity loan to finance a new car, plasma TV, or vacation.
Use an online home equity loans calculator to decide about how much you can afford to borrow. Talk to a few home mortgage lenders and brokers to find out if you can qualify. Mortgage brokers can provide a lot of information about the deals being offered by different housing loan lenders.
Obtain mortgage quotes in writing from a few reputable lenders and brokers, and ask them to write down all the costs associated with the loan. Try to get the 2nd mortgage lenders to compete with each other for your business. See that they don’t increase one cost when they reduce another.
Check the reputation of the loan lender and read the fine print before you sign up.
We can help you to get free, no-obligations quotes from pre-screened lenders in your area with a few clicks. There are no costs or commitments involved and we will not provide your contact information to anyone without your permission.
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