Home Equity Loans 101 – NYC Independent Press
What is an equity loan? What can it do for homeowners.
They are basically an additional mortgage for the house of the homeowner. As an example, suppose the house has a value of $300,000 and someone owes $200,000 on it. There is $100,000 of equity in the home that someone might want to put aside to fund other purposes.
This loan may only be used if you have a home equity mortgage against the home. As you’re not able to make the monthly mortgage installments the home equity loan comes with higher interest rates.
These are loans with a fixed amount, where you borrow a fixed amount, and then pay back an amount that is fixed over an agreed-upon time frame until you have reached the expiration date. You can also get Home equity lines of credits with access to cash, however, the only charge is if you use the money.
Many people take advantage of home equity loans in order to help consolidate debts, and also to streamline their financial accounts. If you fail to make the payments on your home equity loan they could put both your household and yourself members at danger.
To learn more about home equity loans visit the link below.