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
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
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.
1. construction loans
Maybe you have some sort of a "dream" home in your mind that just isn't on the market, or perhaps you've already...
2. fast payday loans
In an ideal scenario Payday loans are cash advances against your personal check. Fact remained that if you want ...
3. tenant loans
In simple terms life is an ongoing process, it makes us happy when we are able to achieve our desires and it mak...