With today's relatively low interest rates and climbing property values, many consumers are considering taping into their home equity to finance everything from home improvement projects to debt consolidation. Secured home loans, also called home equity loans, are loans backed by borrower's equity in their property. Equity is difference between your home's appraised value and balance on your mortgage.
When a homeowner takes out a secured home loan, they promise to repay lender and sign a contract that makes their home collateral for loan. If borrower does not repay loan as agreed, lender has right to foreclose on home. Generally, loans are repaid with a monthly payment over a fixed term.
As interest rates and loan terms may vary widely depending on your credit score, your home equity, and amount of loan, it is important to compare several different lenders to ensure you are getting best loan for your situation.
There are many advantages to secured home loans. Home equity loans generally have lower interest rates than unsecured loans. In addition, there are many different types of secured home loans to fit your needs.