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Home Equity Financing Options – Should You Get a Home Equity Loan?

Home Equity Financing Options - Should You Get a Home Equity Loan? 2

If you own a home, your options for tapping into your equity are

numerous. Some homeowners choose to refinance their home and cash-out at

closing. This may serve a two-fold purpose. You are able to lower your

interest rate, while acquiring a lump sum of money. Those who want access

to emergency cash may opt for an equity line of credit. However, if you

are not interested in refinancing, but need extra cash, a home equity

loan may be the perfect choice.

What is a Home Equity Loan?

A home equity loan is very similar to personal bank loans. However,

unlike personal bank loans which are difficult to qualify for, you may get

an equity loan with good or bad credit. Lenders are more eager to

approve a home equity loan because the funds are secured by the property.

Thus, if you have a low credit score, you may obtain a loan. Of course, a

low credit score may result in a higher mortgage rate.

When to Get a Fixed Rate Home Equity Loan?

Before applying for a home equity loan, carefully consider the

advantages and disadvantages. A home equity loan is a second mortgage. Instead

of paying one monthly mortgage, you are now responsible for two

mortgage payments. The second mortgage is generally cheaper, thus easier to

payoff.

Home equity loans are ideal for consolidating or eliminating high

interest credit card debts. This way, you are able to pay off your consumer

debt at a low fixed rate, and within a specified time frame. Home

equity loans are also useful when you have a large expense.

When to Avoid Home Equity Loans?

While home equity loans are very tempting, avoid applying for a loan if

you cannot afford another bill. In some cases, a second mortgage may

improve your finances. By consolidating credit card debt, you may save

money each month. However, if you are having a difficult time paying

creditors on time, do not get a home equity loan. More than likely, you

will also struggle to pay back the second mortgage. Thus, you are placing

yourself at risk for losing your home.

Home Equity Financing Options - Should You Get a Home Equity Loan? 2
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Source by Carrie Reeder
kontraktor rumah
bina rumah
pinjaman lppsa
pengeluaran kwsp
spesifikasi rumah
rumah ibs
pelan rumah
rekabentuk rumah
bina rumah atas tanah sendiri
kontraktor rumah selangor
rumah banglo