 |
Links |
| Home |
| construction loan |
| tenant loans |
| refinancing student loan |
| commercial loans |
| government loans |
| Sitemap |
Equity Loan Rates
|
There is no denying that choosing the right home equity loan rates for you is quite a tedious job, as there are various banks and financial institutions offering you home equity loans at different rates. As a matter of fact it is up to you to compare the different home equity loan rates to find out which rate fits your budget best.
Although it is worthwhile remembering that the lender sets the home equity loan rate, the interest rates are influenced by a number of factors like market conditions, demand for loans, competition, inflation, credit score, and the Federal Reserve. It is worth mentioning in this regard that the amount you borrow from the lender, the available equity in your home, and the term of the payment of the loan also affect the home equity loan rate. The general thumb rule in this regard is the higher the demand for loans is, the lower is the interest rate. If experts are to be believed it is better to go for the equity loan rates when demand is high. Of course, there is no hiding the fact that different banks and financial institutions quote lower interest rates to entice more customers to their establishments. Theoretically speaking if at all the amount of your loan exceeds the loan limits, you will be quoted a higher interest rate. On the other side of the coin if you opt for shorter loans of 15 or 20 years, you may save thousands of dollars in interest payments over the life of the loan, but your monthly payments will be higher. In simple terms another way of getting lower rates is by giving a large down payment. The general thumb rule in this regard is the higher the down payment is, the better will be the interest quote. And of course, it is worthwhile remembering that if you have a good credit with a monthly income far surpassing your monthly debt obligations, you will get a lower interest rate. In an ideal scenario having a good credit score with a monthly income barely covering your obligations will not give you the lowest rates possible. Whatever the home equity loan rates you choose, it is of utmost significance that the rate is a fixed interest rate that gives you a peace of mind that your payment amount does not fluctuate with the rate fluctuations. While there is no denying that in a home equity line of credit, there is a variable interest rate, leading to fluctuations in the monthly payments as the rates change. On the other hand fixed rate home equity loans allow you to borrow more than your homes value with deductible tax advantages, but are harder to qualify for. Point to be noted in this regard is that home equity loans are the most attractive tool in obtaining the amount you need. As a matter of fact a fixed rate home equity loan is one of the types of home equity loans that allow you to get the full amount at the start of the loan and pay it down in equal payments for the term you selected. In addition the good thing about this fixed rate home equity loan is that the monthly payment amount remains the same all throughout the term of the loan. It is worth mentioning in this regard that the fixed rate home equity loan has many different period lengths that it maybe required for. More often than not you may get a range of 5 to 30 years of loan terms. Always remember that the shorter the term, the more savings you make. It is because of the simple reason that when you apply for a fixed rate home equity loan, the longer the term the bigger the interest rate becomes and the rate at the start of the loan will remain the same at the end of the term, where as in variable rate home equity loan, the rate may change depending on the Prime Rate. In case if the Prime Rate decreases, the rate of the variable rate equity loan also decreases. According to experts fixed rate home equity loan rates is best for homeowners who needed the money for one time use only. In an ideal scenario the advantages of fixed rate home equity loan is that the is tax deductible up to $100,000, the interest rate are fixed, and you can borrow up to 125% of you homes value. On the other hand the downside of fixed home equity loan can be: interest rates are usually higher than home equity line of credit, and fixed end loans. This clearly emphasizes the point that you cant keep borrowing as needed, and its harder to qualify. Interest Only Home Equity Loan Are you comfortable with the interest only home equity loan In simple terms Interest
only home equity loans are another type of home equity loans for homeowners who need cash from their home equity but are worried of that they might not be able to keep up with the payments. It is worthwhile remembering that interest only home equity loans are different from the usual home equity loan because during the preliminary phase, the loan makes an interest only payment which does not include any of the principal. In an ideal scenario the period of the interest only of these types of home equity loans depend on the lender of the interest only home equity loan. As a matter of fact the interest only phase of the interest only home equity loans usually lasts from one to five years. In other word when the phase of the interest only ends, the interest only home equity loan is the converted into a fully amortized and traditional home equity loan. In that scenario the borrower will have to pay off more in less time compared to the usual home equity loan. In addition the interest only phase of these home equity loans are not forever. Thats why always be wary of the terms and agreements of the interest only home equity loan that you are getting. Other Articles |
||
