A home equity loan is a type of loan in which the borrower uses the equity built up in the home as collateral. A home equity loan is sometimes used to finance major expenses such as medical bills, home repairs or education expenses. It is sometimes referred to as a second mortgage or borrowing against your home. Learn more on this page about home equity loans and how you can use one.
A homeowner was unable to contact her home equity lender to get a final pay off amount, so she stopped paying on the loan. She stopped making payments assuming that the company would contact her. This method only hurts her, and she will end up ruining her credit history or going into foreclosure without any warning from the mortgage lender. She needs to try harder to get the contact information, and resume making her payments.
A homeowner is having repairs made to her home costing a large amount of money and considering using the equity in her home instead of cash. The cash can be used to make the repairs and an equity loan or line of credit can be open for emergencies. It makes more sense to use cash earning little interest than to take out a home equity loan at a much higher percentage.
Improving your home takes a lot of time and money. Ilyce helps a reader take advantage of the tax benefits of a home equity loan and suggests ways to save on taxes when selling a home.
A recent retiree is planning on moving to a less expensive area and is thinking about using a home equity line of credit or use the proceeds from the sale of his condo to pay cash for his new home. There are advantages of buying with cash versus financing the new purchase. However, prior home sale contingencies make buyers nervous. He needs to go over all options for home equity loans and cash purchases with a mortgage broker before making a decision.
How do you calculate the profit from the sale of a home, if the owner has a home equity loan? The amount of a home equity loan does not change homeowner's profit on the sale, but it does affect how much actual money the homeowner would receive from the sale. The way to figure out the profit on the sale of the home is to take the sales price and subtract the costs of sale (commission, transfer taxes, title etc) and the costs of purchase. A portion of the homeowner's profit may also be tax-free depending on the number of years the owner has owned and lived in the home.
A timeshare owner is enjoying their property, but not their 17% interest rate. Taking money out of their home equity to pay off the timeshare or getting a personal loan are better solutions. A home equity line of credit or a home equity loan would cost anywhere from 6.5 percent to 9 percent.
This homeowner has two properties in different states and isn't sure which to take out a home equity loan on. One home is planning on being sold soon, so taking out a home equity loan on that home will allow it to be paid off when the home is sold. A mortgage professional can help discuss the home equity loan and whether the second property should be refinanced.