Home Equity Loan Basics

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Home Equity Loan Basics


Apartment Listing  

Ever wondered whether you can take a loan against your existing house without having to shell out exorbitant rates of interest? Then you need to know about the financing option called the home equity loan or HEL. This type of loan allows you to take a loan against the equity in your house and use it to finance the education of your children or for medical and other emergencies.

The best part of the HEL is that you are in effect borrowing against your own money and the only collateral is the remaining equity on your home. If you want to figure out how much equity you own in your home, just take the market value of the home and subtract the amount of mortgaged owed on the home. This resultant figure will give you the equity. Hence, the more that you have repaid on the mortgage, the higher is your equity and hence the higher is the amount that you qualify for in a HEL. However, there is another component to this and that is called the home equity revolving line of credit. What this means is that you can get money in a LOC or line of credit manner by putting your home equity as the collateral. This is like a credit card where you can keep drawing the amount against the equity as long as the LOC is open.

The home equity loan is also referred to as the second mortgage and this is because of the fact that the HEL is like a second loan that you take against the house. A HEL is often cheaper than a bridge loan.

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Home Equity Loan Basics

 
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Home Loans :

Home-Equity-Loans-Pros-And-Cons      In tough times when access to credit is tight and you need to finance your children’s education or pay for medical emergencies, there needs to be a way to meet all these expenses. The home equity loan or HEL is one such mechanism for ensuring that you get access to credit at all times. This is because of the fact that the HEL is raised against the equity of your house and hence, it is guaranteed in a way that other methods of financing are not. More..



 
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Home Equity Loan Basics