The Optimum Word In Home Equity Loan Is Equity. Start With The Fair Market Value Of A Home, Subtract The Mortgages (first And Second) And Any Liens Against The Property, And What You Have Left Is The Equity. This Equity Can Be Used As Collateral To Secure Cash In The Form Of A Loan Or Mortgage. The Amount Borrowed Is Based On A Percentage Of The Appraised Value Of The Home. The Percentage Rate Can Vary From 75 To 125. The Length Of The Financing Will Also Vary. The Two Main Types Of Home Equity Loans Are Fixed Rate Loans And Adjustable Rate Loans.Fixed Rate Loan - Provides A Fixed Amount Of Money At A Fixed Rate Of Interest, Repayable In Equal Payments Over The Life Of The Loan. Fixed Rate Financing Costs More In Set-up Fees And Comes At Higher Interest Than Adjustable Rate Loans. But If Homeowners Stay Put And Interest Rates Go Up, They Will Save Money Over A Comparable Adjustable Rate Loan. Adjustable Rate Loan - The Interest Rate Goes Up Or Down According To The Index Upon Which It Is Based. Adjustable Rate Loans Will Have A Cap On How High The Interest Rate Can Go. Usually Called ARMs (Adjustable Rate Mortgages), This Type Of Loan Has Lower Up-front Costs And Starts At A Lower Interest Rate Than Fixed Rate Financing. This Means Lower Initial Monthly Payments. BPutting Home Equity To Good UsebAccording To The Consumer Banker Association, The Top Ten Reasons For Getting A Home Equity Loan Are:10. Vacation9. Medical Expenses8. Business Expenses7. Household Expenditures6. Investment5. Major Purchase4. Education Expenses3. Automobile Purchase2. Home Improvement1. Debt ConsolidationDebt Consolidation, The Most Popular Reason People Cash Out Their Home Equity, Is A Smart Form Of Financing Because Of The Money It Can Save. For Example, Say You Owe 15,000 On A Credit Card That Charges 17 Interest. If You Get A Debt Consolidation Loan At 9 Interest And Pay It Off In Five Years, Youll Save You Over 30,000!If Youre Paying More Than 15 Interest On Anything, You Should Seriously Consider A Debt Consolidation Loan. The Right Terms Could Drop Your Monthly Payments By 35 - 50, Depending On Interest Rates, Origination Costs And Tax Consequences.Even For People Who Have Bad Credit Or Who Have Filed For Bankruptcy, A Home Equity Loan Is Not Out Of Reach. It Can Be A Good Way To Make A Fresh Start. Websites Like Www.easyhomeequitymortgages.com Help Borrowers With Bad Credit Get The Home Equity Loan That Best Fits Their Unique Situation.
