Free Debt Management & Bankruptcy Articles

Professional Authors - Professional Articles



Debt Management Tips - Understanding Home Equity Loans


Home equity loans are loans that you can take out using the equity of your house as collateral. You can ask an appraiser to make an estimate on the value of your house and compare the numbers to your mortgage. If there is more value to the house than you owe to the bank for your mortgage, you have the possibility of getting a home equity loan. It is a way of taking the value of your house and making that value available to you.

There are different reasons for why anyone would take out a second mortgage on their house. It could be that your house needs some big construction adjustments or repairs, you may have received a medical bill which is not covered by insurance or your child is starting college in the fall and your savings didn’t count on medical school. These are of course very good reasons to liquidate your money, but you still need to think of the consequences. Make sure you know what you can afford on monthly payments and don’t take out more than you absolutely need to, otherwise your medical bills may be paid for or your child may become the best doctor ever, but if your house goes into foreclosure it is too late to think about if it was really worth it.

Luckily the providers of home equity loans don’t tend to dive into the deep end. They don’t give out the loans to just anybody who has value in their house. Often they require an excellent credit history and they only go for reasonable loans compared to the value and tune their interest rates on that information combined with the type of loan you are applying for.

There are two different kinds of home equity loans. The closed end home equity loan is the kind that has an actual ending date in the contract. By this date the entire loan including interest has to be paid off. The monthly payments are calculated in an order that will make sure the loan is paid off when the contract ends. The open end home equity loan doesn’t really have an actual ending date in the contract. The monthly payments are interest only and the total amount of the loan will be paid off once the house is being sold in the future.

Even though the payments for an open end loan are generally lower, because of the interest only calculations, it is probably a wiser decision to go for the closed end loan. That way you know exactly when you have paid off your loan and when the time has come to sell your house, for whatever reasons, you pay the equity in your house to yourself and maybe have a nice retirement.



Comments
Post has no comments.
Post a Comment




Captcha Image






BLOG TAG CLOUD
teaching children finance understanding need money check card building debts debt solution sickness checking account injury credit score household items legal action debt consolidation loans regain control debt consolidation debt management advice good credit asset info gambling debts car loan home equity loans deals in writing interest budget managing debt specific budget categories mortgages budgeting monthly payment credit scores medical bill initial research credit limit lending company overspending full details less money debt relief agency tracking money losing a job candidate help with debt domestic support filing bankruptcy younger children expenses account charges whole family bank monthly budget government assistance debt payment period loan agents savings account down payment credit card company short sale unemployed purchase protection debit card live your life management advice savings negotiate paying out debt original creditor good credit record cash card losing your job hobbies extra payments personal finances liability charitable organisation deb consolidation management program credit rating lose your job paying bills loss of income making payments your rights paycheck income financial security get out of debt mortgage payments insurance unexpected expenses high interest rate taking responsibility budget ideas interest payments interest rate credit checks back support debt settlement debt management mistakes debt management tips rebuild good credit payment behavior loan harassment take control of debt introductory offers own money borrowing hospital home debts phone calls debt collectors allowance purchases repayment plans payday loan companies classify bills monthly bill finances receipt assets help child support debt home equity repay credit card tax info invest money bad financial decisions children saving gambling problem court appearance handling money software careful handling chapter 7 paycheck info personal finance child spending credit card debt second job insurances common debt illness spending interest rates discounts rent payments overcharging family budget payday loan saving payment frequency credit line consumer lawyer investing credit card companies stop harassment debts borrower creditors bankruptcy medical bills cash loan credit card traps debt consolidation medical debt doctors security new job bank accounts prioritizing bills ongoing bills control spending debt free implement a budget utility payments negotiation debt relief more income telephone bills great budget debt traps cable bill understanding home equity worksheet total balance debt problems borrow money overbearing bills comfortable living lending companies past bad debt credit accounts flat broke credit companies modified payment plan loan amount honesty live within means financial education money reduce debts ill health repay loans credit bureaus family assistance social services checks common debt traps monthly payments groceries debt account interest professional good debt installment plan learning experience unreasonable expectations job loss credit history pay off bill education credit repair budget categories save money good budget become free cancer great budget ideas emergency savings account saving money spend money unsecured loan child support credit salary credit card help debt company credit reports children budget budget sheet visualization internet debt collector help good credit rating piling debts pay off debt debt programs credit company credit cards bad debt Consolidation Company trusted friends extra money order report loan companies loans fly-by-night debt management Chapter 13 account fees debt collection agency secured loan installment plans low interest seperate accounts buying a house school jobs part time job restrict spending bad debt management management tips credit report house loan



Copyright 2016 - Free Info Site Enterprises
Privacy Policy  |  Copyright Policy  |  Website Use Policy  |  Non Endorsement Policy  |  Contact Us  

Finance Blogs
best blogs