Check out the rates for home equity loans
If you've lived in your home for a while and built up some equity, you might be thinking about taking out some of that equity. A Home Equity Loan would be a great way to do this.
With a home equity loan, you can borrow against the equity you've built up in your home through its value going up and your monthly mortgage payments, without touching your first mortgage.
Because of this, a home equity loan is sometimes called a second mortgage. But before you start filling out forms, do some research to find the best home equity loan rate.
There are two different kinds of home equity loans that you can get. The first is a typical home equity loan with a fixed rate based on prime, of course. This loan is given to you all at once, and you start making payments on it right away.
The second kind of loan is a credit line against the value of your home. This one comes in the form of a line of credit, as the name suggests. The rate on the home equity line of credit is variable, which means that it goes up and down with the prime rate. For the first five or six months, many of them have lower rates.
Once you've been approved for a home equity line of credit, you won't get the money all at once. Instead, you will get it in the form of a check book, which makes it easy to take out any amount you want whenever you want. Once you take money out of it, you'll have to start paying it back every month. Most of the time, you only pay interest for the first ten years.
Imagine that you were given a home equity line of credit for $25,000. If you only wanted to borrow $6,000, all you would have to do is write out one of the checks the lender sent you and put it in your checking account. Your payment would then be based on the $6,000 you borrowed from your line.
Keep in mind that home equity credit lines have a variable rate that is based on the prime rate. If the prime rate goes up, your home equity credit line rate will also go up.
On the other hand, your home equity credit line rate will go down if the prime rate goes down.
There is a lot of competition between mortgage companies, so if you want a home equity loan, it would be in your best interest to look around and compare rates.
After a few loan officers have looked at your situation and given you a rate and product, choose the one that fits your needs and budget the best.
