Home Equity Loans

Home equity loans are loans made against your home. What this means is you are borrowing money against the equity of your home. Equity in the home is how much of the home you own at a certain time.

Let's say you take out a mortgage loan for $100,000 and after 5 years,

depending on the interest rate and downpayment, you now owe $70,000 on the mortgage,

meaning you have $30,000 equity in your home. Some banks will offer loans up to 125%

of the face value of the home.

Home equity loans normally offer lower interest rates and you can take the interest off on your

taxes much like you can on mortgage interest.

Taking a loan out against the equity of your home can be unsettling especially if you don't have

alot of equity built up. If you defer on payments you could lose your home. It's wise to do your

research and make sure a home equity loan is the right fit for you. If you have a large bit of

equity built up in your home, then a home equity loan would be a good choice as the interest

rates are low and interest is tax deductible.

Even those with bad credit can often secure a home equity loan since the loan is secured by

the home. And lenders will work with you to find a repayment process that fits into your

financial needs. Just make sure the home equity loan is the type of loan for you.