The home equity is the difference between the current value of the house and the amount left to be paid for the mortgage.
You give this equity as a collateral to borrow more money as loan.
Benefits of being secured Being a secured loan it has several benefits attached with it.
First you will have a lower interest rates and secondly you can get fixed or variable l package according to your needs.
How much you can Borrow With Secured Loan You can borrow up to 125% of your homes value.
Usually secured loans offered range from $5,000 to $75,000 for 5 to 25 years.
Mostly the amount you will be allowed to borrow will depend on the equity in your house and your financial situation.
How to Choose the Best Loan To choose the best option you must have to shop around.
Credit unions, banks, mortgage lender, and other financial institutions are the sources of getting a home equity loan.
Most of the lenders are working with the prime rate which means they take applications of people with good credit.
People with bad credit have to do a little more search.
But to save yourself from the hectic search you can hire a mortgage broker.
Mortgage Broker can help Since a mortgage broker is in contact with many lenders offering sub prime loans specially designed for people with bad credit, you have a good chance of getting a loan.
All you need to do is to fill out the application and within some days you will receive several quotes.
Comparison Shopping Compare all the mortgage quotes before you deciding a lender.
If you have a good credit then interest rate offered will be good but if you have a bad credit it will be higher.
Trying to boost the credit score is good idea to apply for a low interest rate.
Home equity line of credit A home equity line of credit is a sub category of home equity loans.
In this type you are allowed to borrow money in sums up to a limit in a certain time period unlike a home equity loan in which you get the entire amount.
It's basically like a credit card.
You can get lump sum money when you need it.
The limit o borrowing money varies form state to state.
Bad Credit Home Equity Loans People with bad credit can access money with home equity loans.
Since these loans are secured, chances for a getting a home equity loan is improved.
For these people this loan can act as a powerful debt consolidation tool.
It can also be used for funding educational expenses of your children or house repairs.
Another good thing is that sometimes the interest is also tax deductible.