subject: Home Equity Loan – which one is best for you? [print this page] Home Equity Loan which one is best for you?
Home equity is the difference between what your home is worth and the amount due on it. For most homeowners their home is their greatest asset, and usually is a treasure trove of cash. In 2005, the value of equity at home in the United States was 11.3 trillion U.S. dollars. The proportion of home ownership in 2005 was 69%, slightly down from a record 69.2% in 2004. Nearly 124 million Americans own their own home.
When it comes to borrowing money with your home as collateral(Home Equity), there are basically only two ways to go, except for a reverse mortgage: a loan Home Equity Line of Credit (HELOC) or a second mortgage. Which is better for you?
Second Mortgage Home Equity Loan
The second mortgage takes the guess work to know what the payment will be each month for many an important role.
Outputs front
gains are fixed
Temporary
Fixed monthlyPayments
Fixed rate
Home Equity Line of Credit Loan
Can be used as needed, but many unknowns, which can be risky, for example, as my payment for next month?
Cash paid-on-Demand
The proceeds are variable as a revolving credit line
Variable rate
Monthly payments variables
Temporary
Both loans are secured by second mortgage on the property. The terms ofThese loans can be between five to twenty years. They are almost always lower than a first mortgage.
The differences on paper, seem minimal. The greater the interest rate, the second mortgage stable, reliable and better quality for the HELOC ago, especially in a dynamic market.
If you are on the market to borrow money against the equity in your home:
1. Do your homework. Research and study what to do.
2. Find the right lender. MoreResearch and teaching.
3. Negotiate rates and points. Pit one creditor over another for your business.
4. Getting a second mortgage instead of a HELOC.
Remember, there is much at stake. Do not press the "EASY" button.
