Home Equity Loan

Home equity loan lenders are waiting to help you.

Home Equity Loans
American Home Loans
Bad Credit Home Loans
Home Improvement Loans
You are here: home loan > home equity loan

Home Equity Loan - Use Your Home As A Source Of Credit

Home equity loans are quickly becoming a very popular source of consumer credit. There are several advantages of a home equity loan over any other type of second mortgage.

Is a home equity loan right for you?

If you need to borrow money, a home equity loan may be one useful source of credit. Initially, a home equity loan can provide you with large sums of cash up front at low interest rates. A home equity loan can also provide you with certain tax advantages unavailable with other loans. Plus the ability to borrow against your home and then eventually invest the money back into your home is a great advantage over another home loan.

More about a home equity loan

But you also have to remember that a home equity loan requires you to use your home as collateral for the loan. This would obviously put your home at risk if you are late with payments or if you default on the loan. A home equity loan could also come with large balloon payments in the front or at the end of the loan. You might think you are getting a break if the balloon payment is at the end of the loan, but you need to be careful and plan for this payment so you don't end up borrowing additional money to pay off your loan. And if you sell your home, most plans require you to pay off your credit line at that time.

One other pitfall to watch out for, a home equity loan gives you relatively easy access to cash, you might find your borrow money more freely than you should. Be smart when choosing a home equity loan. Don't borrow too much and make sure the money goes back into the house. When improving your home, don't just add a pool or something like that just to make your house more comfortable to live in, renovate something that adds value to the house like a kitchen or an additional bathroom.

All material copyright © Home Loan Lane. All rights reserved.

About Us | Contact Us | Site Map | What's New | Related Resources

Mortgage Information