Find Useful Home Equity Loans Information Online

Home equity loans can be found anywhere, and many of the lenders provide their customers with home equity loans information. When getting a home equity loan, the borrower must use their home as collateral for the loan taken. The home equity is a part of the home that the owner actually owns, which is used as the guarantee for the loan. Home equity is calculated by taking the home's current value and subtracting it from the mortgage. For example, if a person's home is worth $250,000 and that person has a mortgage of $150,00, then that person has $100,000 of equity in their home. The loans may also be known as a second mortgage, as it reduces the borrower's ownership in their home, and since the home is the guarantee, homeowners may lose their homes if they default on the loan payments.

In a standard home equity loan home, borrowers' will receive a lump sum payment at a fixed interest rate that they must repay in monthly installments over the life of the loan. The monthly payments will be fixed, since the monthly payments are fixed. Using home equity loans information, homeowners will be able to obtain quotes that will help determine if the loan is right for them. A sample rate quote might include the home's equity, interest rate, and monthly payments. For example, a loan for $30,000 with an interest rate of 7.5 percent would be paid back in monthly payments of 356.11 over a ten-year life of the loan. When searching for home equity loans information, home owners will find another option, which is the home equity line of credit.

The home equity line of credit works like the traditional line of credit, where the borrower is granted an amount they can borrow and draw the money from the account when needed. Interest is paid only on the actual amount that is borrowed, and the interest rate is variable over the life of the loan. Using home equity loans information, will help potential borrowers' see that it is also possible to get a fixed rate on a home equity line of credit. Finding home equity loans information will also help homeowners obtain quotes on a home equity line of credit. For example, if a $20,000 home equity line of credit is obtained, and $10,000 is borrowed with a 5 percent variable rate, then if $5,000 is paid towards the principal amount, then the borrower will still have $15,000 that can be borrowed as needed.

A cash-out refinancing loan is not actually a type of home equity loan, but home equity loans information will tell potential customers that this loan does allow them to borrow against the equity of their home. In this loan, homeowners can take out a new mortgage that is greater than what they owe on the current mortgage. The homeowner must pay off their current mortgage and use the difference as a home equity loan. For example, a home is valued over $150,000, the mortgage is $100,000, and there is $50,000 worth of equity in the home, and the mortgage rate is 9 percent. If the interest rates go down after the purchase of the home, the owner will be able to take advantage of this by borrowing $20,000 from the equity of the home for a home improvement project. A new loan can be taken out for $120,000 at the rate of 6 percent; the $100,000 will be used to pay off the old mortgage, and the $20,000 will be used for home improvements.