Home equity loans and information about rates and home equity loan applications

Home Equity Loans

Do you have a decent amount of equity in your home? Do you have other debts such as credit cards, or would you like to make an improvement on your home? It might be worthwhile to see if home equity loans are right for you. Benefiting form the equity in your home can be a good financial decision if interest rates are low enough.

Think things through carefully before you get a home equity loan.

Reasons to apply for home equity loans

  • Home improvements - You can use your home equity to pay for major remodeling and other home improvement projects. If you are thinking of remodeling your kitchen, bathroom (upgrading kitchens and bathrooms are actually the 2 top ways to increase your home's value if you are not increasing your house's square footage), adding a deck or replacing your windows, it might make sense to apply for a home equity loan.
  • Consolidate debts - Use a home equity loan to consolidate all of your bills into a single monthly payment. Not only will you have just 1 payment to make instead of many, but the interest is likely to be tax deductible. In addition to paying a lower rate compared to credit card debt, but you are getting an added tax break, further lowering your costs to repay your outstanding debts. When applying for a home equity loan, make sure the interest is tax deductible. Read IRS Publication 936 to determine if your home equity loan interest is deductible.
  • Other large purchases or expenses - You can use a home equity loan to pay for large expenses such as a new car, education, medical bills and investments. Be careful here. What you don't want to do is use what is likely to be your most precious financial asset (your home's equity) on frivolous expenditures such as vacations, luxury cars, or trying to keep up with the Jones's.

When applying for a home equity loan:

  • Don't take out a home equity loan if you can't make the loan payments.
  • Read the fine print carefully. Know what you are agreeing to when you sign your home equity loan documents.
  • Don't get upside down! Many lenders offer home equity loans on your house even though there is no equity in it. The limit is usually 125% of the value of your home. You now have loans (and debts) greater than the value of your house. To get right side up, you will either have to pay down the loans or hope that the increase in your home's value bails you out. If you have to sell your house you will find yourself in a very difficult position.
  • If you do get a home equity loan to consolidate debts, try to make extra payments towards principle every month. Otherwise those credit card debts will be with you for the life of your loan, 30 years in the case of a 30 year mortgage loan!

What is the next step?

Do you own a home? If you do, it is quite likely that you can get a home equity loan. You can transfer your existing credit card debt, finance home improvements, pay for education or anything else that will help your long term finances with a home equity loan.

Obtain a Second Mortgage or Home Equity Loan with America's Lending Partners. Within minutes you can find out what rates and amounts you qualify for. Turn your finances around today!

Good Luck!

Home equity loans rates and online applications pictures

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