What is a Home Equity Loan?

Written by John Mussi


A home equity loan is a loan that is guaranteed by your home. Are you in urgent need for cash and want to getrepparttar same without selling off your home or property? Getting a home equity loan is a good way to do so.

Equity on your home is essentiallyrepparttar 142603 difference betweenrepparttar 142604 value of your home andrepparttar 142605 outstanding mortgage. Lot of finance companies today offer good deals on home equity loans, letting you borrow money based onrepparttar 142606 available equity on your home.

This type of loans product basically works onrepparttar 142607 idea that you userepparttar 142608 amount you own within your property as collateral against a loan. You put it up as a guarantee to your lender that you can repay any loans. This allows you to free uprepparttar 142609 amount you already own within your property and use it as hard cash.

Most lenders will work out how much equity you have for you - but it's simple enough to do it yourself. All you need to do is to work out how much your property is currently worth and then subtract your mortgage from it. If you're not sure how much is currently outstanding on your mortgage, have a chat with your lender and they'll be able to help you out.

A home equity loan allows homeowners to accessrepparttar 142610 equity in their primary residence without having to sellrepparttar 142611 property. Equity isrepparttar 142612 difference between what a home is worth and what is owed against it. Traditionally, home equity loans were called second and third mortgages.

You might have heard about using these types of financing products to meet your financial goals. Most home equity loans are simply second mortgages, structured either as a lump sum loan similar to a first mortgage, or as a line of credit.

Home equity loans are also referred to as "Equity Release Scheme". The money you get on a home equity loan can be used for a variety of purposes such as to fund home improvement, buy a new car, consolidate your debts or finance a travel plan.

Guide to Home Equity Loans

Written by John Mussi


Here is a useful guide to home equity loans. A home equity loan is quite simply a loan against your house. Another term for a home equity loan is a mortgage or second mortgage. Home equity loans are also known as equity release schemes.

You are borrowing on what your house is worth. If your house is paid off,repparttar term is "mortgage" and if your house is not paid off but has equity,repparttar 142602 term is called a "second mortgage". For ease of understanding however, this article will refer to these loans as Home Equity Loans.

A home equity loan is a second loan that you take out on your home in addition to your mortgage. This is also called a second mortgage. This enables you to tap into your equity to get cash without refinancing your first mortgage. Many people think thatrepparttar 142603 only way to access this cash is to sell their homes. The reality is that you can take out home equity loans to free it up without having to move at all!

Equity isrepparttar 142604 difference betweenrepparttar 142605 amount you owe on your current home mortgage andrepparttar 142606 current value of your home. Lot of finance companies today offer good deals on home equity loans, letting you borrow money based onrepparttar 142607 available equity on your home.

This can be explained further, suppose you sold your home, you will be left with a certain amount of money after paying off your mortgage, which would mean actual cash in your pockets. A home equity loan allows you to get that cash without having to actually sell your home or property.

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