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A home equity loan is a way of cashing out your investment in your house.

Basically you're borrowing against your investment -- your equity-- in your home. Example: Suppose you bought your house ten years ago for $100,000. Today, it's worth $120,000. You have paid off $20,000 in principle. So, your current mortgage is for $80,000 and your home is worth $120,000. A home equity loan would allow you to borrow $20,000 - $40,000.

Be aware that many, many people are using home equity loans to finance elaborate vacations or spending sprees, which most financial advisors discourage. Such a move usually reduces your net worth to zero -- or below. That's money you will have to pay back, usually before you retire.

Home equity loans may be a wise choice if a)you use them to finance education, b)you use them to pay off high-interest credit card debt or c) you invest the money in an asset that returns more than real estate.

For most people, whose home is their single largest investment and who need to pay it off to retire -- home equity loans are not great ideas.

A home-equity loan, also known as a second mortgage, lets homeowners borrow money by leveraging the equity in their homes. Home-equity loans exploded in popularity in 1996 as they provided a way for consumers to somewhat circumvent that year's tax changes, which eliminated deductions for the interest on most consumer purchases.

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โˆ™ 2013-04-03 01:03:44
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Related questions

Where can mobile home equity loans be found?

You can apply for mobile home equity loans online at the website, MountainSideFinancial. They are the nations current leader for mobile home equity loans.


Does everyone need equity loans for their home?

Everyone does not need equity loans for their home. Equity loans are only needed if the home-owner does not have sufficient funds to continue paying for the home in question.


Where could one find info on home equity loans in Columbia?

Information on home equity loans in Columbia can be obtained from many Colombian financial websites that offer home equity loans. One example of a site that offers home equity loans in the Columbia Bank.


What does Equity Loans company specialize in?

Equity Loans is a company that offers mortgage solutions to people. They assist with paper work and all the loan related work when a person is buying a home.


What is the function of the company No Equity Loans?

No Equity Loans company offers home loans nationwide with no equity required. They provide loans up to $200,000 with adjustable and fixed rates with up to 125% of the home's value.


Where can one find information on fixed home equity loans?

One may find information on fixed home equity loans by using the website "Zillow". They a great FAQ (frequently asked questions) section that explains how these loans work.


Where can one find home equity loans at fixed rate?

There are many places where one can find home equity loans at fixed rate. On the websites "bankrate" or "zillow" one can find home equity loans at fixed rate.


What banks offer the lowest rate home equity loans?

There are two banks that offer the lowest rate home equity loans. These two banks that offer low rate home equity loans are RBC and The Bank of America.


Can I finance my home remodel by getting a home equity loan?

"The short answer to your question is yes. Home equity loans are designed to give the home owner the ability to access some capital by taking a loan against the equity in your home. These types of loans are often used for home improvement projects, and larger purchases as an alternative to using credit cards or other loans as home equity loans tend to be lower interest loans."


What is the difference between a home improvement loan and a home equity loan?

Home improvement loans are given to people who want to do renovations on their house. Home equity loans are loans that are given out with the assurance of the house.


Where can one find information on home equity improvement loans?

One can find information on home equity improvement loans online on websites, such as Nationwide, Mortgage 101 and TD Bank. There are different types of home equity improvement loans.


What credit options are available from Pioneer Credit?

Pioneer Credit Union offers auto loans, mortgage loans, home equity loans, home equity lines of credit, student loans, personal loans and business loans.


Can you get a home equity loan if your home is paid for?

Absolutely! Home equity loans enable homeowners to get cash out of the equity in their home. As Homeowners pay down their mortgage, they build equity; equity is also built as a home’s value increases. You can borrow against your equity in your home. To check out more about home equity loans visit LendingTree.


How much equity loans do you have on your house?

Equity loans vary from owner to owner. To see how much equity loans you have on your home, you need to contact your real estate agent or broker. They can then give you the specifics on your equity.


Home equity loans should have stronger restrictions for potential applicants.?

Home equity loans should have stronger restrictions for potential applicants.


Does Key Bank offer home equity loans?

Key Bank does offer home equity loans to those that qualify. They offer both standard and high value home equity loans, and also offer payment protection and online banking.


What are the benefits of Countrywide Home Equity loans?

Countrywide Home Equity Loans offer borrowers the ability to use funds when they need based on the value of their homes. These loans can be used for home improvement projects.


In what states does Wachovia offer Home Equity Loans?

Wachovia, or Wells Fargo, offer Home Equity Loans in all 50 states. Wells Fargo Home Equity Loans have low interest rates, funds available anytime, and have no closing costs.


Does ameriquest mortgage company do no equity home loans?

No they will not. No one is giving no equity home loans right now. The best you can so is a personal loan.


Which banks offer online home equity loans?

Some banks that offer online home equity loans include the Royal Bank (RBC) and President's Choice (PC). In fact, most mainstream banks will have home equity loans and offer online services for them.


Are home equity loans harder or easier to obtain than other types of loans?

A home equity loan (sometimes abbreviated HEL) is a type of loan in which the borrower uses the equity in their home as collateral. These loans are useful to finance major expenses such as home repairs, medical bills or college education. A home equity loan creates a lien against the borrower's house, and reduces actual home equity.


What are some reliable home equity lenders in the Boston area?

There are a number of reliable home equity lenders one could use in the Boston area. Wells Fargo have a good reputation and offer home equity loans. Mortgage Equity Partners and Citizens Bank also offer home equity loans.


How many home equity loans can you have?

One


Where can one find information on refinancing home equity loans?

One can find information on refinancing home equity loans at local banks, financing companies and credit unions. There are also several online sites one can consult for information on refinancing home equity loans.


Give more information on GMAC home equity loans?

GMAC home equity loans are such loans, where one can pay a part of the value of the home or property at the start and pay in parts later as they use it for their own needs.