Home Equity Loan Information - How to use One WiselyWritten by John Ross
Using a home equity loan to get out of debt or make improvements to your home is usually a smart move. You have earned equity, so it only makes sense that you put it to good use. Usually this type of loan offers a lower interest rate than credit cards or traditional loans, so it is a wise move for many circumstances. Perhaps one of smartest uses of a home equity loan is for home improvements. You can take a $10,000 dollar loan, put it towards a new kitchen, and then turn around and sell your home for a profit. There are a few tips to getting most out of your home equity loan. Use your head and ask questions, and you should have no trouble making right decision.First, you need to do your homework. We cannot stress this enough! The more you know about process and your lender, better prepared you will be come closing time. Get quotes from several lenders, which will give you a bargaining chip when it comes time to secure a loan. If you have found other lenders that can offer you a better deal, use that to your advantage. Always get it in writing. Second, understand what market is doing at moment. Research current interest rates available as well as government prime rate. This will help give you a picture of where economy is headed. Understanding value of your neighborhood will also come into play during process. For instance, if a golf course or park is in process of being built, you may find that value of your home will skyrocket once feature is in place. Consider waiting until construction is complete, to get top dollar for your home.
| | Home Equity Loans - 5 Useful Application TipsWritten by John Ross
Obtaining a home equity loan does not have to be a major ordeal. Unlike your first mortgage, you are already in home, and usually time is not such a major factor. You can close loan at your own leisure, and take your time researching different options available to you. Below you will find five tips that will help you make process as painless as possible. Remember that your best defense is a good offense, so understand process and everything that is involved. Don't let your lender pressure you into something that you don't understand.1. Get pre-approved! This is something that I would recommend for a first or second mortgage. The process will vary depending on your lender, but you can choose to get pre-approved or pre-qualified. The pre-qualification process allows both you and lender to review your current financial situation. The lender will then determine how much you can probably borrow. There is no obligation and you are not locked into anything. Pre-approval goes a step further and is a more formal process. You will actually fill out an application, and a credit check will be run. The lender will then issue you a letter outlining amount that you can borrow. You can then use this to expedite your loan, once you are ready to close. 2. Get your home appraised. When obtaining a home equity loan, critical part of puzzle is how much your home is worth. Don't be fooled into thinking that an appraisal is not necessary. Home values can fluctuate depending on economy and your own city demographics. Any improvements that you have added to home since its purchase can also increase this value. So find out at very beginning how much your home is actually worth. This will help give you a ballpark figure of how much you can actually borrow.
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