Low interest rates have created a favorable market for borrowers looking for home equity loans. Now is a better time than ever to use the equity of your home to finance home improvements or the furthering of your education. Fill out our free short form to contact up to four lenders about home equity loans.
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A home equity loan allows homeowners to borrow up to 85% of the value of their home. The amount of equity that a particular home holds is the total selling price of the home minus the total of the mortgage. The home owner may consider that a loan based on equity is unlike money received from other loans. This 85% percent is something that the homeowner already owns, so the financial risk usually associated with a loan is lessened in this set of circumstances.
Homeowners may also want to look into setting up a home equity line of credit. If interested in this type of loan, a home owner can open a line of credit based on the equity of the home, from which funds can be drawn for a predetermined length of time. A home equity credit line is a good choice for borrowers who manage irregular or unexpected expenses.
Two major advantages of home equity loans are that payment of interest is tax deductible and that interest rates are very low. As a result of these advantages many borrowers use home equity loans to pay off high interest credit cards and loans.