Home Equity Loans

Home equity loans (HELOC) are becoming increasingly more popular with homeowners. This is true due to lower home equity loan rates and the increasing equity from increased home values. Home equity loan rates follow the prime rate are directly affected by the Federal Reserve’s rate cuts. Traditionally a home equity loan was called a second mortgage and in the past considered high priced. There are plenty of advantages when securing an equity loan, its tax deductible, and the rates are fairly low and you can use the money at any time. A home equity loan is a revolving credit line and you can use it like a credit card. You can pay it off or you can pay interest only. Most equity loans at some point have to be repaid and lenders usually have a program to repay outstanding balances owed with principal and interest after a 10 or 15 year period. The difference between a home equity loan and a fixed second mortgage is a fixed second mortgage has a set term and a fixed monthly payment until the loan is paid off. Home equity lines of credit allow you to use as much or as little of the credit line as you like up to an approved dollar amount.

The disadvantage of a home equity loan is if rates go up you can have higher monthly payments. Home equity loan rates have come way down over the past 15 years. This is an excellent instrument when you need money for short periods. If you receive bonuses on your job and have payments due now a home equity loan would allow you to pay it now and payback the loan when you receive your bonus. Another benefit to a home equity loan is that instead of redoing your first mortgage and paying closing costs you can now close an equity loan with a minimum of fees. This can make few thousand dollar difference in closing costs.

RefinancingUSA.com has a many home equity loan mortgage programs. We specialize in second mortgages and home equity loans.