You are viewing the printer-friendly version of Get a Home Equity Loan Get a Home Equity LoanA home equity loan is worth its weight in gold if your fridge goes out and you don't have any savings to replace it.A home equity loan is secured by the equity in your home. Equity is the difference between the fair market value and current indebtedness. You may be able to borrow up to 125% of what your house is worth at current market prices, less what you owe on your mortgage. It can be a one time fixed rate of interest loan that you get for a specific purpose. It can also be a home equity line of credit with a pre agreed ceiling and fluctuating interest rate that you can use for many things over a period of years. You can pay this down between purchases. The main thing about home equity loans and lines of credit is that they carry a lower interest rate than credit cards and unsecured loans. Because you are using your home equity as security reduces the risk of loss for the bank. The interest may also be tax deductible. Good uses are debt consolidation, home improvements, landscaping projects, new cars, tuition fees, emergency repairs, purchases and replacements of appliances, roof, furnaces and things like that. Renovations and repairs will enhance the value of your home. Those are good reasons for home equity line of credit. A long term fixed rate home equity loan allows you to pay off all your cards in swoop. This leaves you with 1 payment you can manage, as long as you don't start charging again. Be sure to be conservative about how you use your home equity loan. Think twice about using it to purchase stocks or start a new business. If they fail your home could be at risk. Also, be conservative about how much you borrow. Some lenders are willing to advance you 90% of the value of your equity. If the prices of homes in your area fall, your lender may call your loan in. before borrowing make sure you research the kinds of home equity loans that are available, and ask your lender to explain the details of them. aa |