Did you know that if you have a home that you've been
paying on for years, you may have a lot of usable money right under your
nose? What's more, a home equity loan just may be the perfect way to get
your hands on that money!
Home equity loans.
Here's how it works. Let's imagine that your home mortgage is for
$250,000, but after years of paying on that note, you only owe the
mortgage company $100,000. In this instance, you would have $150,000
in equity in your home. A home equity loan is a specific type of
loan that will allow you to borrow against that equity.
Why would you want to do this? The number one reason that people
take out home equity loans is as a means to consolidate their debt.
Because a home equity loan is a secured loan, the interest rates
are considerably lower than that of credit credits or personal loans.
And so if a person had $10,000 in credit card debt, they could reduce
the total amount of owed-as well as their monthly payments-by taking
out a home equity loan and using the cash to pay off their credit
Another great reason for taking out a home equity loan is to make
improvements on your home. Have you been thinking about adding a
swimming pool to your backyard? A greenhouse to your yard? A new
bedroom or bathroom addition? A home equity loan is a great way
to finance those types of projects.
Use a home equity loan to improve your home.
Shop around to find the best home equity loan to suit your needs.
Your first step should be to talk to your current mortgage company about
your options, but don't stop there. You will quickly find that there are
plenty of companies who are willing to lend you money against your house,
and so you should shop around for the best deal.
And that brings us to our final point. A home equity loan is secured by
your home. What that means is that if you don't make the payments on time,
the lender will have the right to take your home and sell it in order
to collect on the debt. Make sure that you are in a position to pay back
any amount you borrow against your home! our home. You can enjoy the things
you do with your home equity loan knowing you've made a wise decision.