| How does a home equity loan work? |
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financegenie
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| How does a home equity loan work? |
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I need to know all the details and if it is a good choice. I have payed off my vehicle and credit cards and have none, but I have alot of student loan debt. Our dilema are the student loans. And paying them. I have heard about home equity loans and heard about being tax deductible. How do they work? Do they look bad on your credit? How much can you borrow ? Does it add to the years to pay off your house? We only have eleven years left to pay as it is right now. Just wondering what is a good option. I even thought that after I graduate and am working that my pay checks can go all to my student loans. I am just looking for some good ideas without having to stress out about debt and bills and such. We are trying to pay our bills off and so far have done good. But those student loans are looming in the background.
Thanks
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Fri Dec 24, 2010 8:59 am |
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$hawn585
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Hey Finance Genie - lots of good questions, and I actually don't know the answers to all, but can suggest an article to read - on http://www.homeequityloan.net . Loads of information on there that should help you 
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Thu Jan 13, 2011 6:28 pm |
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buziness2011
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| Re: How does a home equity loan work? |
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The equity loan is the surplus amount that you can borrow against your property. Lets say if you took a mortgage of your home worth $350K and the current market value is $400K, and you have no delinquency, then you can borrow the built up equity based on the percentage amount you have paid. The bank who gave you the loan will tell you the exact amount.
quote:
Originally posted by financegenie
I need to know all the details and if it is a good choice. I have payed off my vehicle and credit cards and have none, but I have alot of student loan debt. Our dilema are the student loans. And paying them. I have heard about home equity loans and heard about being tax deductible. How do they work? Do they look bad on your credit? How much can you borrow ? Does it add to the years to pay off your house? We only have eleven years left to pay as it is right now. Just wondering what is a good option. I even thought that after I graduate and am working that my pay checks can go all to my student loans. I am just looking for some good ideas without having to stress out about debt and bills and such. We are trying to pay our bills off and so far have done good. But those student loans are looming in the background.
Thanks
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Thu Jan 13, 2011 7:12 pm |
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fortunebilly
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| Re: How does a home equity loan work? |
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quote:
Originally posted by buziness2011
The equity loan is the surplus amount that you can borrow against your property. Lets say if you took a mortgage of your home worth $350K and the current market value is $400K, and you have no delinquency, then you can borrow the built up equity based on the percentage amount you have paid. The bank who gave you the loan will tell you the exact amount.
quote:
Originally posted by financegenie
I need to know all the details and if it is a good choice. I have payed off my vehicle and credit cards and have none, but I have alot of student loan debt. Our dilema are the student loans. And paying them. I have heard about home equity loans and heard about being tax deductible. How do they work? Do they look bad on your credit? How much can you borrow ? Does it add to the years to pay off your house? We only have eleven years left to pay as it is right now. Just wondering what is a good option. I even thought that after I graduate and am working that my pay checks can go all to my student loans. I am just looking for some good ideas without having to stress out about debt and bills and such. We are trying to pay our bills off and so far have done good. But those student loans are looming in the background.
Thanks
Good answer . Actually i was looking for the same Question's Answer and you gave a good answer so many thanks
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Sun Jan 16, 2011 2:36 pm |
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marketeye
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A home equity loan is basically like a second mortgage on your home and qualify for higher rates because it is riskier to the lender. Also, the new loan cannot exceed the current value of your home. If you cannot repay the debt you could risk losing your home for collateral.
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Thu Feb 10, 2011 9:46 pm |
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MrPolarZero
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I don't think a home equity loan is a good thing to get right now. The thing is, you still have the student loan to pay off, and there is apparently no need for you to get the equity loan yet.
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Mon Feb 14, 2011 5:19 am |
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kvnfrnk
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Its like a second mortgage on your house. Assess the value of your home, minus the amount owed on the mortgage first loan a percentage of the difference. You do not have to pay two mortgage payments.
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Tue Mar 08, 2011 2:00 pm |
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reversemortgageinfo
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| Home Equity Loan Vs a Reverse Mortgage |
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Another option similar to a home equity loan, is a reverse mortgage. There are several features of a reverse mortgage, that many will find beneficial over a home equity loan.
First and foremost, a reverse mortgage is only available to homeowners 62 and older. Home equity loans are available to all borrowers, regardless of age.
Here are the main differences between a home equity loan and a reverse mortgage.
When you take out a home equity loan you receive the loan as a credit card or check. You recieve the total amount of the loan at the closing. With a reverse mortgage you can receive a line of credit, lump sum or fixed or monthly payment, or a combination of any of those.
However, the greatest difference is how you pay back the loan. With a home equity loan you make monthly payments until the loan is paid down. Reverse mortgages do not require monthly payments as they do not have to be paid back until the last surviving homeowner permanently leaves the home. It can be paid back with private funds, or with funds from selling the home.
The amount you can borrow with a reverse mortgage is usually much greater. When you borrow against your home equity you can generally just receive the difference between the how much you owe and the value of the home. However, with a reverse mortgage you are only eligible if you have a low mortgage balance, usually 50% or less. You can choose to borrow a portion or even the entire value of the house.
A reverse mortgage is a great way for older homeowners to enjoy the equity they've built up in their home, while eliminating their current mortgage payments.
Both loans can be used for any purpose.
Stephanie Jameson
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National Reverse Mortgage
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Tue Apr 05, 2011 2:55 pm |
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affiliates111
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Home Equity means that you have excess money as a result of your monthly payment from your mortgage. U can use this money to fix your house or for other personal purposes. This is somehow taxable as far as i know. I suggest to only use for any worse case scenario might come up in your life.
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Tue Apr 05, 2011 5:11 pm |
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smithhooper
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You can only borrow on the equity you have in the home. If the home is paid for, then you can get a much larger home equity loan.Pulling equity out of your house does not sound like a good option to refinance your student loans.It is true that you can use interest paid on a home equity loan as a tax deduction, but you can also use interest paid on student loans as a deduction.
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Wed Apr 06, 2011 6:00 am |
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AtoZ
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Home equity loans are like a second mortgage in that if you default for some reason your home is on the line right?
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Thu Apr 07, 2011 6:49 pm |
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vvslaura
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A home equity loan is a secured loan using the equity in your house as collateral for the loan. The equity in your house is equal to the value of your home minus what you owe on your mortgage.
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Tue Jun 21, 2011 9:46 am |
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Jail Nation
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Loan is a loan that is secured by equity in the house of the debtor. Since the borrowers home is used as collateral, lenders usually offer an interest rate that is lower than what would be a loan without collateral. The most common reasons for a loan for the market "do you, the debt payments of others who have a high interest rate, and pay for other expensive items, such as college or medicalBills.
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Tue Jun 21, 2011 10:11 am |
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johnmathews
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Home equity loans are a line of credit that allow you to borrow money against the value of your home. You must have sufficient equity in your home, meaning your home must be worth more than what you currently owe for your mortgage. The repayment period for a home equity loan is typically shorter than the typical 30 year mortgage.
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Tue Oct 18, 2011 7:31 am |
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