Home equity are loans that homeowners can get in order to only be required to pay a small amount of their monthly payments. Of course, not everyone can get a home equity loan, but it can be easier than you might think. Here is a basic breakdown of who can and can not get a home equity loan.
Who Qualifies for a Home Equity Loan?
You can get a home equity loan if you have more equity in your house than you currently have in your mortgage. You only need to have mortgage payments that are greater than 80% of your home’s value. The difference between your mortgage and your house value is the equity or the money that you have available to you. The money must be at least the amount that your mortgage payment would be if you cut a new deal and get a new mortgage.
Also, if you have enough equity to cover the amount that you’re wanting to borrow, it can be given to you in an open end type of home equity. If you take out a fixed home equity loan, you will only be able to borrow the amount that your current mortgage will be. These home equity loans are a valuable tool to homeowners who needs to get home improvements and other big expenses not covered by standard home equity loan.
Who Can Receive a Home Equity Loan?
Anyone can get a home equity loan. However, generally banks are not giving out the loans to individuals and often you will have to have a great credit history in order to get a loan but they are more willing to approve people with good credit history. You also can get a loan if you have a decent credit score too. However, getting a home equity loan as opposed to a line of credit is a lot safer for the banks and for you. If you type of line of credit always has a risk and if you don’t pay off the whole amount that you borrowed then you’re credit can be ruined. They always do their best to avoid that with a home equity line of credits because the risk is much much lower than a standard credit card.
Where Can I Find a Home Equity Loan?
A home equity loan can be found just about anywhere. There are many lenders who do this kind of loan on a regular basis. however, the interest rates are generally much higher and sometimes there are closing fees as well so it is best that you look around first before you settle on one. It is also important that you read all the fine print so that you do not miss out on anything. Research and look around so that you can find the best lenders and also get the lowest rates.
What Can I Do With My Home Equity Loan?
If you decide to get a home equity loan, then it is always good to have a plan in mind. It could be that you want to add on a new room, in the kitchen or bathroom, put up some siding or get a new roof. Of course each circumstance is different and will need to be researched for before you jump and do anything. If you are planning on moving, it is always good to have a list of loans that are available with the lowest interest rates. It also might be a good idea to contact the loan officers to see what deals are available. It usually is one of worst selling times for home equity loans and the home equity loan might be the only option if your credit is not up to par.
Home equity loans can usually be found just about anywhere.