Article Categories
» Arts & Entertainment
» Automotive
» Business
» Careers & Jobs
» Education & Reference
» Finance
» Food & Drink
» Health & Fitness
» Home & Family
» Internet & Online Businesses
» Miscellaneous
» Self Improvement
» Shopping
» Society & News
» Sports & Recreation
» Technology
» Travel & Leisure
» Writing & Speaking

  Listed Article

  Category: Articles » Finance » Article
 

Things you need to know about home equity




By Jay MonCliff

Taking advantage of existing equity in your home through an equity loan might seem an intelligent choice, especially in times of low interest rates. However, before you take a home equity loan to pay for children's education, buy a car or just pay off credit cards, you should educate yourself about the risks
associated with this type of finance, and whether it can work for you.

In essence, a home equity loan uses the current equity you have in your home as collateral for a second mortgage. The more equity you have, the more you can borrow. As with all finance provided against security such as property, if you do not maintain your payments, you run the risk of foreclosure on your home. This fact comes as sobering news for many, so you must consider your ability to repay the loan before you borrow against the equity in your home.

Many people like the sound of this type of loan, but neither understand the concept of existing equity, or know if they actually have any in their home. Equity is how much of your initial home loan you have actually paid back. A rule of thumb to determine how much equity you might have, take your home's current
value and subtract it from the outstanding loan amount. The remainder is your equity, and amongst other things will be used to determine how much you can afford to borrow. For example, if your home is currently worth $400,000 and you have $280,000 outstanding on your mortgage, your existing equity is $120,000.

This information is the starting point for any home equity loan application. Educating yourself about interest rates, home equity and the application process in general places you in a better position should you decide to apply, and negotiating a home equity loan, the more knowledge you hold at the start of
negotiations, the better rate you are likely to receive
 
 
About the Author
Jay Moncliff is the founder of
http://www.loansreviews.info
a website specialized on Equity Home Loan, resources and articles. This site provides updated information on Equity Home Loan. For more info visit his site: Equity Home Loan


Article Source: http://www.simplysearch4it.com/article/20958.html
 
If you wish to add the above article to your website or newsletters then please include the "Article Source: http://www.simplysearch4it.com/article/20958.html" as shown above and make it hyperlinked.



  Some other articles by Jay MonCliff
Should You Consider Home Refinance, or Not?
With interest rates at all-time lows, many people are considering whether or not to refinance their home loan. Generally speaking, if you bought your home with ...

Choosing the Right Golf Club for You
Golf club selection can be difficult for seasoned players, and even more so for beginners. There are so many variables in this difficult choice different club types, designs, and features, not to mention your ...

Planning Your Financial Future
We are all guilty of putting off making time to plan our financial future. It's hard, that's why, particularly finding the discipline to do it ...

What to Look for in a Financial Advisor
Competent financial advisors don't have a particular look about them, even if they claim to have proof of their ability. To protect ...

Tips to Lower Your Debt Levels
With the levels of debt in America today many Americans should take a compulsory course in credit and debt management. Unfortunately, this ignorance in relation to positive credit management means many Americans are doing ...

Stop paying standard hotel rates through the web
Easy internet access to discounted and affordable hotel rates has sounded the death knell for the standard tariff, or rack rate posted at hotel reception desks. Whilst some still prefer traditional telephone reservations and the corresponding ...

  
  Recent Articles
Tenants With Poor Credit Even Enjoys Loan
by Turk Malloy

The UK Consumer's Guide to Shopping for Car Insurance Online
by Mary Simone

Are You Throwing Your Money Away?
by John Cranley

Easy personal loan to finance your desire!
by frank howard

Bad credit consumers can still find sources of financial assistance
by Martin McAllister

Setting up a Merchant Account
by John Tillman

Individual Voluntary Arrangement: How Does It Work?
by Martin McAllister

Stop Foreclosure - We buy houses
by Ron victor

Tax foreclosures property investment could be a nightmare investment
by mike

Spotting tax foreclosure property in USA
by mike

Making money online is virualy free
by Phill Evans

Online Criminal Background Checks: Importance & Ease
by Asel Retrac

Can't connect to database