Home equity loans gives borrowers the opportunity to fulfill their dreams by being granted a loan even if they are struggling to get high credit standing. Buying a home is a huge investment that is generally financed by a first mortgage. The need for a second mortgage generally arises when one is forced to spend on repairs pertaining to the house. A home equity loan is a lump sum payment made to the borrower. The borrower in turn is expected to pay interest and principal payments on a monthly basis. The interest payments may be tax deductible. Home equity loan [HEL] is a loan which is borrowed by the homeowner by keeping the home as collateral or security with the bank or financial institution from whom it is borrowed. If you’re a homeowner, you can borrow against the value of your house through either a home equity line of credit or a home equity loan. Both are essentially a second mortgage. With a home equity loan, you receive a lump sum of money and have a fixed monthly payment that you pay off over a predetermined time period.
Have you been feeling nervous about your financial situation lately? If so, you’re not alone. Home equity loan line of credit is availed for meeting expenses that are of a recurring nature. This is because home equity loan line of credit is a type of revolving credit that allows the consumer to make withdrawals, up to the sanctioned limit, by using a check. The consumer is usually expected to pay interest on the home equity loan line of credit that is variable and fluctuates with the prime rate of interest. A home equity loan line of credit allows you to draw funds, up to a predetermined limit, whenever you need money. There is generally a minimum payment due each month, with the option to pay off as much of the line as you want. The way that you draw and repay funds for a home equity loan line of credit is similar to the way you draw and repay funds for other revolving lines of credit, such as a credit card. Generally, a home equity loan line of credit is a good choice to meet ongoing cash needs, such as college tuition payments or medical bills. A home equity loan is more suitable when you need money for a specific, one-time purpose, such as buying a car or a major renovation. In each case, the amount you can borrow is based on factors such as your income, debts, the value of your home, how much you still owe on your mortgage and your credit history. Regardless of whether the home equity loan line of credit is a second mortgage or a first mortgage, the total amount sanctioned in lieu of the line of credit depends on the borrower’s equity in the house, which is computed as the difference between the market value of the house and the remaining primary mortgage balance.
Home equity loan calculator will help you determine how much equity you have in your home that you can borrow against. Many homeowners decide to take the equity they have in their home and put it to work for them—often borrowing against it for college tuition or home improvements. If you’re thinking of tapping into your home equity, it’s a good idea to know what you have to work with. Use the home equity loan calculator to estimate your current and future home equity so that you can make smarter choices for how to use it in the future. Home equity loan calculator helps you to calculate your home’s equity and find the home equity loan that’s best for you.