Home equity Loans – An introduction
Whether you need money for medical bills, college, or home repairs, a home equity loan might be the right choice for you. A home equity loan is a loan in which the borrower uses the equity in his or her home as collateral. There are two types of home equity loans; closed-end home equity loans, and open-end home equity loans.
The closed end home equtiy loan is like a traditional loan, and is commonly called a “second mortgage”. With the closed end home equity loan, the borrower recieves the full loan amount at the time of the loan’s closing. The loan is then to be paid back by the borrower in monthly payments. The monthly payments are fixed, and the loan has to be paid in full during a specific period of time, usually 10-15 years.
If you do not pay the home equity loan back, then your home is at stake and may be foreclosed upon. This is sobering news many people are not aware of, so getting a home equity loan requires some thought and the ability to repay the home equity loan as well.
Home equity loans help you remodel your home at great rates. It helps improve the value of your home by increasing your equity and writes off interest charges on your tax returns. Whatever may be the reason for your loan, it is important that you get the loan from the best lender. This can be done by making online comparisons for home equity loans with the best rates. Once you are in control of the terms of the loan, you can use it to your maximum flexibility.
They may lend you a loan that you can’t possiblly afford. It is important to pick a reputable lender by doing your research. Just because a lender has the lowest closing costs does not make that lender the best choice.