The Facts About Second Mortgages

Your home: It's probably your biggest asset. Having a home to back you up when you need a loan is one of the greatest advantages of home ownership. In recent years, there has been a major increase in the amount of people looking to use their homes as a way to get access to extra money when they need it most. One of the best ways to do this is through a second mortgage.

A second mortgage is exactly what it says it is - a loan made in addition to your first mortgage, and it's based on the amount of equity you have built into your home. Many people use them to fund home renovations, to pay off credit cards, or to put a child through college. Since you've already been through the process once, the underwriting required to get a second mortgage is much simpler than it was the first time around, and the cost of the transactions involved will be significantly lower. This usually makes up for the fact that interest rates on the second mortgage are a bit higher than they were on the first one.

On a second mortgage, you will borrow a fixed sum of money against your home equity, and pay it back over a specified amount of time. The amount you borrow will be combined with the amount you still owe on your first mortgage.

It all sounds pretty simple. There are just a few things to keep in mind. First of all, don't take out a second mortgage on your home unless you've built up a fair amount of equity in the property already- that is, made payments on the original mortgage balance for a good amount of time. You may still be able to get a second mortgage if you don't have much equity, but your rates will be so much higher, and the amount you can borrow so much lower, that it will essentially be a waste of your time and money. This is one of those things that is worth waiting for.

Also, look into the other options of borrowing against the equity of your home, including a home equity loan and a home equity line of credit. All of these options allow you to borrow against your equity, but there are slight variations among them that mean one of the three may be the best option for you. It will depend, for the most part, on your particular financial standing, the amount of money you need to borrow, and the amount of home equity you currently have.





About the Author:

Joseph Kenny is the webmaster of the loan information sites http://www.selectloans.co.uk/ and also http://www.ukpersonalloanstore.co.uk. At the Personal Loan Store you can find all the different loan types explained.
Source: www.isnare.com

The Truth About Home Improvement Loans

Are you planning to stay in your home for a long time, but you aren't quite satisfied with the
look of your home? Do you think your home could use new cabinets in the kitchen? Perhaps your house
needs a new roof or new carpets? Or maybe you think your house needs a new bathroom? If you are
thinking like this in anyway, you probably need to look into home improvement loans. Home improvement loans are what people use to make improvements such as these to their home. If you are unsure about this subject, there are some things you should know. Please continue to read for the truth about home improvement loans.

Most home improvement loans are often FHA loans that are commonly insured because they are used to
improve a home or rehabilitate it so it revitalizes it in an aging neighborhood. In essence, home
improvements are seen as a good thing where lenders are concerned. But home improvement loans can
be costly. Most home improvement loans are done through a home equity line of credit or home equity loans. Some are even done with a second mortgage. This, in reality, costs people a lot more money. When you get your home improvement loans in this manner, you are actually getting the money from your equity... money you have already put towards paying off the house. This means you are basically starting all over and paying for the house all over again.

There are many factors to consider when you search for a lender to get the home improvement loans
from. Before you start, make sure your credit score is as good as it can possibly be. Next, when getting home improvement loans, try to search for the one with a low fixed rate. Variable rates tend to change quite often and thus cost people more money in the end. Also, when searching for home improvement loans, look into the ones that will get you the cash when you need it. Some lenders take an awfully long time to get you the money you are asking for. Lastly, when looking for home improvement loans, search for the ones with the best deals. Some lenders offer no appraisal fees and no lender fees. This will in turn save you a bit of money.

This is some of the important things you need to know when you decide to look into home improvement loans. You want to make your home beautiful, but be sure you do it in the cheapest manner possible. With careful research, you should be able to find the right home improvement loan for you that will save you money in the end. You can then look forward to having a lovely home!





About the Author:

Tripp Taylor offers expert advice and great tips regarding all aspects concerning Loans. Get the information you are seeking now by visiting http://www.loanscentral.info
Source: www.isnare.com

Trendy Indiana Mortgage Refinancing and Second Mortgage Programs: A Brief Review

The combination of rising interest rates (although still historically low) and rising home prices has caused the robust mortgage market to slow from its record pace. This has motivated Indiana lenders to either introduce creative new loan products or to more aggressively market existing products. If you have not shopped for a in a while, you will find numerous new products from which to choose. Following is a brief review of some of the new and popular products available today.

Interest Only - With this loan program you are paying only the interest on your Indiana mortgage and are not paying any principal. This reduces your monthly payments and can allow you to afford a larger home or save more money on a mortgage refinancing or home purchase loan. If used carefully, you can also free up cash flow that can be used for investment purposes or to pay down high interest rate debt.

Negative Amortization - These are often marketed using the phrase "option arm" or "choice mortgage". With this loan type, your payment does not cover all of the monthly interest. Often, your mortgage balance is increasing and the underlying interest rate is usually a monthly variable rate. These loans are used to dramatically reduce your monthly payment and can be used for an Indiana mortgage refinancing or home purchase. This program should be reserved for the more sophisticated borrower and it is important that you understand the terms of the loan. Click here for more information about Indiana Mortgage Refinancing and Indiana Second Mortgage Solutions.

40 Year Amortization - Rather than paying off in 30 years, this loan pays off in 40 years. As with the Negative Amortization and Interest Only, this program is used to reduce your monthly payment.

Stated Income / Reduced Income Documentation Loans - There are a variety of these loan products available, but they are primarily used to for individuals with difficult to verify income. These can be used for Indiana Mortgage Refinancing, Indiana Second Mortgages and Home Purchase Loans. As lenders have become more comfortable with credit scoring, these products have become very popular. Essentially the lender is relying on the credit score for their loan decision. They realize that borrowers with higher credit scores will pay their mortgage and they do not need to fully verify their income.

ALT A Programs - The "ALT" is short for Alternative and the "A" refers to the borrower category. These are categories of mortgages that fall outside the more stringent guidelines of Fannie Mae and Freddie Mac. Generally these mortgage refinancing programs allow for more flexibility with regards to loan to values and income documentation requirements and can be used for home purchase, mortgage refinancing and second mortgages.

Hybrid Second Mortgages - Traditionally, your options for an Indiana second mortgage were either a fixed rate, fixed term loan or a variable rate, open ended line of credit. Now, you can have the benefit of both. You can start your second mortgage as a variable rate home equity line of credit and then lock in all or a portion of it to a fixed rate for a fixed number of years.

About the author:

Chris France is a professional mortgage planner with over 10 years lending and banking experience. For additional questions or comments about this article, please contact Chris France at American Mortgage Funding Corp or christopher.france@branch.cfic.com or 1-800-943-9472.

Unsecured Debt Consolidation - Tips For Getting A No-collateral Loan

Getting an unsecured debt consolidation is not easy, but possible. For the most part, banks and other financial institutions are hesitant to loan money that is not secured by a piece of property. If you were to default on the loan, the lender is unable to recoup their lost. However, some lenders are willing to offer unsecured debt consolidation loans. To obtain such as loan, you must be a prime candidate

Traditional Debt Consolidation Options

Typically, consumers would obtain a debt consolidation using their vehicle or home as collateral. This involved giving the lender possession of a vehicle title or applying for a home equity loan or home equity line of credit. In both instances, if you were unable to repay the loan, the lender could claim your home or car.

Today, many financial institutions are making it possible for consumers to obtain unsecured personal debt consolidation loans. These loans do not require collateral, which could mean a higher interest rate.

Getting Approved for an Unsecured Debt Consolidation Loan

If you are hoping to get approved for an unsecured debt consolidation loan, you must take steps to ensure that banks will consider you a prime applicant. Unsecured debt consolidated loans are not offered to just anyone. Because these loans are not secured, financial institutions are very cautious.

To obtain an unsecured debt consolidation loan, lenders require a very good credit rating. Hence, the key to getting approved for any type of unsecured loan is boosting your credit. To begin, check your personal credit report. Contact several lenders and inquire of their individuals requirements for obtaining an unsecured loan.

In most cases, lenders will require a minimum credit score. If you meet their lending requirements, request a quote. In fact, get quotes from at least three or four lenders. Unsecured loans may carry a higher interest rate. However, some lenders will offer comparative rates for top applicants. These consist of individuals with remarkably high credit scores.

Lenders rarely offer unsecured debt consolidation loans to people with fair or bad credit ratings. The odds of these prospective borrowers defaulting on the loan are much higher. For the most part, persons with a superb credit rating will not risk damaging their credit, which makes them prime candidates for unsecured loans.

About the author:

View our recommended companies for Unsecured Debt Consolidation or view all of our Recomm ended Debt Consolidation Companies Online.

WARNING: Many Home-Owners Could Be Living Above Their Means!

San Ramon, CA -- Federal Reserve Board Chairman, Alan Greenspan, commented best when he stated "Homeowners might have saved tens of thousands of dollars had they held Adjustable-Rate mortgages rather than Fixed rate mortgages during the past decade". If you own a 30year fixed mortgage, the first 10years of your payments will be applied towards paying down your mortgage interest; on average only 15% of your original principle balance will have been reduced. Considering the fact that most people will live in their homes approximately 5 to 7years, it makes since to plan what your goals will be before deciding on a loan program; your decision could affect your financial planning for the next 10years.

Statistically speaking, if you have a family of four (2 adults and 2 kids), a loan balance of $400K with an interest rate of 4.5% (4.642% APR), you'll need a Combined Yearly Income of $140,000 just to Almost Break Even each month; actually you could have a loss of approximately $478 per month.
Here's the breakdown: Income $140K per year x 35% (tax bracket) = $91K per year ($7,583 mo.) Monthly Expenses: $2,027 (Principle + Interest) + $417 (taxes) + $117 (home insurance) + $1K (2 car payments) + $800 (food) + $500 (health insurance) + $2K (family of 4 living expenses) + $300 (student loans) + $300 (credit cards) + $600 (childcare services) = $8,061 Total Expenses. These figures don't include any increases from your local county assessor's office, car repair bills, cost of living increases, cable or satellite services, utilities, etc.

Rather than considering shorter termed loans (with more favorable rates and payment options), the customer will keep their existing loan (they like the current low rate) and take out a Home Equity Line of Credit.
Currently our economy is prospering; this good news creates a rising Prime Rate, which increases the payment rate on your Equity Line of Credit. Some people are using their Equity Line of Credit accounts in order to maintain their current standard of living. One of two things will eventually happen: a) The client will have to prematurely sell their home because they can't afford the payments or b) The client will maximize their existing equity and be forced to make higher payments; this scenario has the possibility of a foreclosure waiting to happen.

In addition to establishing your goals and determining the right loan program, you should also understand the character of a real estate investor. Treat your property as an Investment and NOT a Retirement! Learn to use your equity as leverage in order to obtain greater wealth! Ask yourself what are you trying to accomplish with this transaction? In our opinion, "rate shopping" is the old process for selecting a mortgage loan and it should be replaced with "payment shopping". Did you know there's a loan program available that may have a higher interest rate than you currently have, but provides you with a lower monthly payment (plus extra monthly cash-flow), and no negative amortization? Also, don't view negative amortization as a dark cloud in terms of loan programs; depending on how long you plan on staying in your home, this lower payment option could be a blessing in disguise for the true Real Estate Investor.
Copyright � 2005 2002 - 2005 Brisco & Associates. All Rights Reserved

About the Author
Brisco & Associates is a growing company that offers services in the following categories: Mortgage Consultation, Contract Mortgage Processing, and Mortgage Education. Dwight Brisco can also assist your mortgage financing needs in 46 states. Visit our web site at http://www.freemortgage-info.com, select FREE Reports, and sign up to receive more information. Dwight Brisco is licensed (01380942) by the California Department of Real Estate.

Wells Fargo Home Equity Lines Of Credit Explained

Think you already know what this subject is all about? Chances are that you dont, but by the end of this article you will! Wells Fargo offers a revolving credit line for homeowners called Home Equity Lines of Credit, or HELOCs. This line of credit is an open-ended, revolving loan that allows future advances up to the approved credit limit.

You can use the money for home improvements, debt consolidation, medical expenses, investment opportunities, starting a business, education, a new car or boat, or any other major expense. Since Wells Fargo's Home Equity Lines of Credit are revolving loans, you can use only the money you need when you need it, much like credit cards.

This credit is available at any time during your draw period with convenient access through your Wells Fargo credit card, checking account, ATM, online banking, or local bank. The draw period of a Home Equity Line of Credit is the amount of time the line of credit is open, usually ten years, after which the line of credit is closed and repayment starts.

Keep reading further to learn how this topic can benefit you, as the rest of this article will supply you will the needed information.

Advances taken out during this draw period may have small monthly payments in which only minimal amounts are paid toward the principle with the rest of the payment going to accrued interest, or interest only payments may be made. Wells Fargo offers plans that allow repayment of the Home Equity Line of Credit loan over a fixed period of time after the draw period has ended. Some of these plans allow up to thirty years repayment time.

Interest of Wells Fargo Home Equity Lines of Credit is variable and tied to the Prime Lending Rate, the rate in which most major banks charge their largest and most credit worthy customers. This variable rate usually has a cap to limit how high of an interest rate can be charged and some have limits as to how low the interest rate can get. Variable rates are subject to quarterly adjustment though some plans offer a fixed interest rate. The interest paid on Wells Fargo Home Equity Lines of Credit is only paid on the funds that are used and is usually tax deductible.

Like Home Equity Loans, Home Equity Lines of Credit have fees that may be charged for taking out the loan. Some plans call for one-time; up front fees while others have annual fees. Plans that offer low monthly payments during the draw period may require a balloon payment at the end of the loan period requiring the entire remaining balance to be paid.

Other fees can also apply such as appraisal fee, credit check fee, and closing costs. The Federal Truth in Lending Act protects the borrower by requiring the lender to inform the borrower of all costs and terms when the application is given. Still need more information about this topic? To learn more, visit your local library or do a simple Internet search.





About the Author:

Ken Charnely is a personal finance enthusiast with http://www.online-loans-pro.com/ dedicated to quality information on online loans. For all your online loan needs visit and apply for loans online
Source: www.isnare.com

What Equity Is and How to Use It

With the current popularity of loans based upon home equity, a lot of people find themselves wondering exactly what equity is and how it's used.
If you're one of these people, take heart... by the end of this article you'll have a much better understanding of home equity and exactly what happens when you take out a home equity loan or a home equity line of credit.
First of all, though, you need to learn what home equity is and how it is created.

Defining home equity
Home equity is an often-used term in the advertising of financial services these days, but most of the ads that use it don't bother explain what home equity is.
At its most simple, home equity is the amount of the house or other real estate that you actually "own"... it's the portion of the mortgage on the property that you've actually paid off.

A house that was purchased a few months ago will have little to no equity, since at best only a few payments have been made toward the mortgage amount; a house that was purchased 15 years ago, though, will have a good portion of the mortgage paid off and will therefore have quite a bit of equity built up.
The more equity there is in a piece of real estate, the more valuable that property is in the eyes of lenders... after all, that's a much smaller portion of the property's value that still has to be paid off.

Using your equity
In order to use your equity effectively, you'll have to use it as collateral for a loan or a line of credit. The amount of equity that you have available will be a major factor in the amount of interest that you pay and the loan terms that you are subjected to; the more equity that you have in your home, the lower the amount of the home that's still left to be paid off should you not make you loan payments on time.

Of course, there are a few differences between home equity loans and home equity lines of credit... each can be used in specific ways, and the situation that you plan to use them in can determine which of the two is the better choice for your needs.

Home equity loans
A home equity loan is a specific amount that you borrow from a bank or other lender and that is going to be used for a specific purpose.
A home equity loan can be used to pay for a variety of expenses, such as automotive financing, debt consolidation, or home improvements, or it can even be used to refinance the mortgage at a lower interest rate and monthly payment.
The important thing to remember is that home equity loans are of a specific amount, so the entire amount must be paid back to clear the loan.

Home equity lines of credit
As opposed to a home equity loan, a home equity line of credit sets a maximum amount that can be used (based upon the available equity) and allows the homeowner to use whatever portion of that amount best suits their needs.
This works in much the same way as a credit card, and allows for purchases over a longer period of time without having a specific set amount to repay.
Home equity lines of credit are often used for home improvements or when multiple purchases need to be made without knowing the total cost of all of them.
You may freely reprint this article provided the following author's biography (including the live URL link) remains intact:

About the Author
John Mussi is the founder of Direct Online Loans who help homeowners find the best available loans via the www.directonlineloans.co.uk website.

What Is A FHA Loan?

Most of us need to borrow some money at least at one point of time in our life. When we want to buy a car, to study at the College or University, when we want to buy a house or home, when we need money to start our own business - even when we use our credit cards.

There are many types of loans and mortgages, such as FHA loans, Student loans, College loans, Business loans, Personal loans, Commercial loans, Payday loans, Auto loans, Car loans, Vehicle loans, Mobile home loans, Motorcycle loans, Military loans, Construction loans, Home loans, house loans, home equity loans, Bridge loans, Disaster loans, farm operating loans, Agriculture loans, Debt consolidation loans, Direct Loans, Government loans, Unsecured loans, refinance/remortgage loans, Bad credit loans, etc., just to name a few.

Within each loan term there are additional sub terms such as Fixed rate vs. Variable rate, Adjustable rate, ARM, PITI, HELOC, Balloon Mortgage, reverse mortgage, and other bewildering financial terms we will try to clarify here.

What is FHA

Home mortgages are important part of the loans universe but we will concentrate here On a specific one called FHA. The Federal Housing Administration (FHA), a wholly owned government corporation, was established under the National Housing Act of 1934 to improve housing standards and conditions. Its goal was to provide an adequate home financing system through insurance of mortgages, and to stabilize the mortgage market.

FHA is not a loan, It's an Insurance! If a home buyer defaults, the lender is paid from the insurance fund. An FHA loan allows you to buy a house with as little as 3% down payment, instead of the higher percentages required to secure many conventional loans. Taking advantage of the FHA loan program is a great way for first time buyers, or anyone with a shortage of down payment funds, to buy a home. It is not a program reserved only for first time home buyers. You can buy your third or fourth home with an FHA loan. The only stipulation is that you may only have one FHA loan at a time.

FHA helps low and moderate-income families purchase homes by keeping the initial costs down. By serving as an umbrella under which lenders have the confidence to extend loans to those who may not meet conventional loan requirements, FHA's mortgage insurance allows individuals to qualify who may have been previously denied for a home loan by conventional underwriting guidelines. It also protects lenders against loan default on mortgages for properties that include manufactured homes, single-family and multifamily properties, and some health-related facilities.

The two very basic terms you need to understand is A.PITI and B. Long Term Debt. PITI stands for Principle, Interest, Taxes, and Insurance. It is with relations to your Mortgage and property housing total monthly cost. Your maximum PITI should not exceed 29% of your gross monthly income.

Long term debt includes such things as car loans and credit cards balances. In order to qualify for FHA loan your PITI + Long Term Debt should not exceed 41% of gross monthly income.

This is much lenient terms compared to conventional loan terms of maximum PITI of 26% - 28% and Total PITI + Long Term Debt of 33% -36%.

Qualifying for an FHA loan you need the following:

- Good credit history that shows you meet your financial obligations.

- PITI + Long Term Debt not to exceed 41% of gross monthly income.

- Sufficient cash down payment at time of closing. 3% of the total cost.

- Closing expenses cost of 2%-3% of the price of the house. (Homeowner's Insurance, Attorney's fees, title fees, and title insurance, Private Mortgage Insurance if you are paying less than 20% down, the loan origination fee, and a fee that goes into the FHA insurance fund).

The FHA ARM - Adjustable Rate Mortgages is a HUD -US Department of Housing and Urban Development, mortgage specifically designed for low and moderate-income families who are trying to make the transition into home ownership. At the time it is issued, the ARM usually has an interest rate several percentage points below a fixed rate mortgage.

The interest rate can change as market conditions change. If interest rates go up, so does your mortgage payment. If they come down, your mortgage payment comes down, too.

The reverse mortgage is often of interest to senior homeowners. This loan provides cash for living, health or other expenses. Payments are made to the borrower in a lump sum or monthly. Most reverse mortgages are issued to those 62 and older who own a debt-free home with no tax liens.

A Home Equity Line of Credit (HELOC) lets you use equity in your home to pay for home improvements, debt consolidation or other financial goals. With an acceptable debt, credit and employment history, you may be able to borrow up to 85% of the appraised equity in your home.

Balloon Mortgage - the buyer pays interest for three to five years on a balloon mortgage. After that the entire principal comes due all at once.





About the Author:

Amit Laufer is a writer & internet marketer. MBA & Bsc. Computers and Information Systems. Owner & Editor of: http://www.loans-money-infoweb.com
Source: www.isnare.com

Which loan is which?

Here is a summary of some of the most common loans available today.

Home Equity Loan

A loan based on the difference between the present value of your home and its original price, less any unpaid balance on your mortgage. If your home is worth more now than it was when you bought it, that extra equity is considered to be collateral for this loan. You can receive the entire principal as a lump sum or opt for a home equity line of credit that allows you to pay only interest on money you've actually spent. Look for a no-fee home equity loan at a competitive rate of interest that allows you the option of just paying interest each month and does not require any repayment of the principal for 10 or more years. Although home equity loans are attractive because the interest you pay is tax-deductible, keep in mind that the lender can sell your home if you fail to repay the loan. If possible, try to repay a home equity loan in two to three years.

Payday Loan

Payday loans go by several names including cash advance, check loan, or post-dated loan. These are all the same type of short-term loan for amounts between $100 and $1000 depending on your financial situation. Payday loans are for small financial emergencies. You can save money on late charges or bounced checks by securing a cash advance against your next payday. You usually have thirty days to pay back the loan, although with additional fees you can take longer to pay back the loan. To apply for a loan you must have a job and a bank account with a check book. A poor credit rating or debt history is initially not a problem.

Auto Loan

This type of loan uses your car as collateral. The vehicle will belong to you at the end of then finance period with no residuals to pay. Until that time most lenders will keep the legal title to the vehicle in their name. If you can't make payments, the lender may be able to repossess your car and sell it. It may not be a bad idea to borrow money to buy a car if you intend to keep it for a long period of time and you can't or don't want to lay down cash for it.

Personal Loan

There are two categories of personal loans: secured and unsecured loans. The difference between the two is the use of collateral against the loan. Secured loans, using your belongings as security against the loan, are suitable for when you are trying to raise a large amount, are having difficulty getting an unsecured loan, or have a poor credit history. In an unsecured loan, the lender solely depend on the ability of the borrower to meet their loan borrowing repayments. These type of loans, generally, involve less money and need to be paid off in a shorter amount of time.

Business Loan

A business loan is designed for a wide range of small, medium and startup business needs including the purchase, refinance, expansion of a business, development loans or any type of commercial investment. Business loans are generally available at highly competitive interest rates from leading commercial loan lenders. A business loan can be secured by all types of collateral, varying from business properties to personal belongings.



About the author:

Karin Boode is the founder of the Loan Info Center, who strives to provide valuable information regarding any type of loan via the http://www.loan-infocenter.com website.

Why Choose A Home Equity Loan?

There are many reasons for choosing a home equity loan. A home equity loan allows homeowners to obtain a loan in addition to their original loan using the equity in their home. Home equity loans are generally a second mortgage, and are used for personal use.

Home equity loans are also known as equity release schemes. Home equity loans are aimed mainly at those homeowners that have paid their mortgages off. They can receive a cash lump sum or some income by unlocking that capital.

People take out a home equity loan for a variety of reasons. Some people do it in order to finance home improvements, buy a new car, consolidate their debts or go on holiday. Others may want to receive a regular income source so that they can pay for residential care, or just the cost of care.

Home equity loans have fixed rates with longer terms, over a fixed period of time. Home equity loans can be ideal for longer-term financial goals because you receive the amount of money you borrow in one lump sum. A home equity line of credit is similar to a credit card, where you may regularly use it up to your credit limit.

One of the premium features of a home equity line of credit is that the interest rate is typically lower than that of a credit card.

A Home Equity Loan will usually mean that you get better interest rates, but you should always remember that your house is at risk if you fail to repay the Home Equity Loan.

The amount you can borrow with a Home Equity Loan depends on the amount of equity in your property. Equity is the market value of your property minus any outstanding mortgage or loans you have on it.

People with poor credit ratings will find a Home Equity Loan more easily accessible to them because the lender is taking a lot less risk themselves. Home equity loans are also beneficial for people with a poor credit rating. A lot of traditional lenders categorise such people as "high-risk". Home equity loans for such borrowers don't pose any risk as in case the borrower defaults on the repayments, the lender can sell the house to reclaim the money from the available equity.

Here are some of the benefits of a home equity loan:

A Home Equity Loan is an easy and manageable route to generating extra cash.

Using Home Equity Loan for debt consolidation means that with one single payment each month, you have more control over your monthly budget.

With a remortgage you have the same expenses you do when taking on a mortgage: surveys, valuation, mortgage indemnity and solicitors fees to pay. With Home Equity Loan you have none of this, making it easier to arrange.

Repayment period on Home Equity Loan can be anything from 5 - 25 years.

You can use Home Equity Loan for any purpose - for example, debt consolidation, home improvements, buying a car or going on holiday.

Protected payment plans for Home Equity Loan can provide extra peace of mind.

Always consider your options carefully, as your home is at risk if you do not keep up repayments on a mortgage or other loans secured on it.


About the Author:

John Mussi is the founder of Direct Online Loans who help UK homeowners find the best available loans via the www.directonlineloans.co.uk website.
Source: www.isnare.com

Why Get a Home Equity Loan?

If you're a homeowner, chances are that you've been deluged with offers from finance companies to lend you money based on the equity you have invested in your home. A home equity loan is a loan extended to you that is secured by your home. The amount of the loan is based on how much 'equity' you have invested in your home. The basic explanation of 'equity' is 'the difference between your home's value and how much you still owe on the mortgage'.

In other words, if you bought your home for $125,000 and put $20,000 down on it, financing $105,000, then your equity in your home on the day that you close the deal is $20,000. Now imagine several years pass. You've paid off $15,000 toward your mortgage - but at the same time, the value of your house has increased to $175,000. Your equity in your home is now $85,000: $175,000 (your home's current value) - $90,000 (the amount you still owe on your home) = $85,000.

A home equity loan allows you to turn the equity you have in your home into cash by borrowing money and using your home as collateral to insure that you'll repay it. If you default on the loan, the bank or housing agency can force the sale of your home to recover its money.

There are many reasons that people apply for home equity loans, though most fall into a few broad categories. The reason for taking out a home equity loan will often determine what kind of loan you apply for.

Debt Consolidation

By far one of the biggest reasons that homeowners apply for a home equity loan is to consolidate their debts. If you have outstanding debt to several different creditors at several different interest rates, it's often to your benefit to consolidate all those loans. To do that, you can take out a home equity loan for the amount that you owe on all your debts together - or more - then use that money to pay off all your outstanding debts in full. By doing that, you trade writing several checks each month for writing one check, which is often less than the amount that you've been paying on all of the debts combined. This is because you're also trading in the higher interest rates on your credit cards and loans for a lower interest rate on one loan. Chances are that you've also set a fixed time to pay back that loan, most often 15 years, though it could be as little as five or as much as thirty.

Home Improvements

If you want to make improvements or repairs to your home, it only makes sense to get the money OUT of your home to do it. Home improvements are one of the top five reasons that homeowners give for taking out home equity loans. If the reason for making improvements is to increase the home's value or prepare it for a sale, then you should definitely take a look at the home improvements that return the most on your investment. In many cases, when the reason for taking out a home equity loan is to pay for home improvements, the homeowner applies for a home equity line of credit rather than a flat out loan.

Weddings, Vacations and College

Special events like weddings and vacations are the third most popular reason for taking out a home equity loan. For a wedding or other special event, where there will be multiple payments made to different merchants, a home equity line of credit is often a better choice than a lump sum home equity loan.

About the Author
Joseph Kenny is the webmaster of the loan information sites http://www.selectloans.co.uk/ and also http://www.ukpersonalloanstore.co.uk.

Your Auto Financing Options

You've found the car that makes your heart race by 120 beats per minute. Now only one thing stands between you and the car of your dreams: financing the buy. In a perfect world, you'd pay the total price in cash without blinking. But if you're comparable to the seven out of ten car and truck buyers who don't exist in a perfect world, chances are you'd be paying for your car by way of one of several financing schemes.

Understanding the basics of each car financing choice is key to choosing the automobile financing strategy that best suits your position. Here is an overview of auto financing options that may be obtainable to you.

Auto Loans from Lending Institutions

You can get a car loan from a bank, credit union, or other lending institutions. The car that you buy will serve as collateral for the auto loan. This means that the lender can repossess your automobile if you default on the car loan. Auto loans are a popular car financing option because they on average offer reasonable interest rates and are rather uncomplicated to get.

Two factors are likely to affect the total cost of the car loan. One is the term or duration of the loan. On average, the longer the term of the loan, the lower your monthly installment will be. But you'll end up paying additional towards interest and this will increase the total expenditure of the auto loan. If you can afford it, get a short-term loan. Your monthly installment will be higher, but you'll be paying less money over all. The second factor that may affect the total cost of your car loan is your credit rating. Creditors with less-than-stellar credit history are commonly charged a higher interest rate because of the elevated credit risk.

Dealer Financing

Like traditional auto loans, dealer financing is reasonably effortless to get. Most dealerships keep relationships with several lending institutions, so they can arrange car loans even for car buyers with blemished credit histories. To compete with standard bank loans, most dealerships offer zero percent or extremely low interest on dealer loans. Still, such loans are available to car buyers with stellar credit ratings. Customer experts advise car buyers to get pre-approved on an auto loan from a bank or credit union before approaching the dealership for possible financing. By getting loan pre-approval from another lending establishment, a car buyer gets the upper hand when bargaining for a lower rate on a dealer loan.

Home Equity Loans and Home Equity Lines of Credit

If you own a house and have accumulated considerable equity on your property, then you may consider getting a home equity loan or a home equity line of credit. Home equity loans are fixed or adjustable rate loans that you repay over a set time. Home equity lines of credit are open-ended, adjustable-rate revolving loans with a maximum credit limit based on the equity of your residence. Home equity loans incline to have lower interest rates than credit cards and other types of individual loans. Interest payments on home equity loans may also be tax-deductible up to a certain extent. Home equity loans and home equity lines of credit use your home as collateral, so be sure you are financially qualified of paying the monthly installments if you don't want run the risk of losing your home.

Credit Cards

A credit card advance or credit card draft from your credit card company can assist you drive your dream car home. Like home equity lines of credit, credit card advances or credit card drafts are revolving lines of credit with variable interest rates. To entice existing customers to avail themselves of credit card drafts, credit card companies forgo cash-advance fees, assure low rates during the initial term of the loan, or offer high credit limits. However, because credit card drafts are unsecured, they generally have higher interest rates than home equity loans, traditional auto loans or dealer loans. Financing your auto purchase through credit cards could also leave you vulnerable to hefty penalty charges if you make a late payment or surpass your credit limit.



About the Author:

Brennan Howe is webmaster of http://carbuy.freeinfosites.com where you can find extensive car buying advice.

Source: www.isnare.com