Home is, undoubtedly, the most valuable asset that homeowners use along with low home equity loan rates to finance their major expenses like new car, new home, school tuition fees, home renovation, or debt consolidation. Home equity loans are becoming immensely popular because It includes the home value in the remaining equity amount after the deduction of any unpaid mortgage.

Home equity loans also referred to as the second mortgage, allow homeowners to borrow a specific amount of money for large expenses. This loan amount can be used by homeowners to handle their large expenses or consolidate debts by controlling the available home equity. As a matter of fact, home equity is based on the actual difference between the current mortgage value and the appraised home value. For example, if your current mortgage value is $100,000 and the appraised value of your home is $200,000, then your available home equity is $100,000.

Home equity loans allow the homeowners to borrow as much as 75 to 80 percent of the home equity and they come with low and reasonable home equity loan rates. Home equity loans can be easily secured with a mortgage. It is essential for you to learn that there are two types of home equity loans: home equity line of credit and pure home equity loan. Both these types of home equity loans can be secured with a mortgage, thereby allowing the lender to sell or foreclose at the end of the home equity loan period in case of non-payment.

In case of an approved home equity loan, the borrower is sanctioned full loan value at a specific home equity loan rates, depending on the loan amount. However, in an equity line of credit, a specific credit line is granted to the borrower and he is allowed to withdraw it in different amounts as per his needs. It is important for you to know that the interest amount due on the home equity line of credit is calculated on the withdrawn amount and not on the entire credit value.

Home equity loans are just like a second mortgage and you can use them to finance:

• Debt Consolidation
• A new home or property
• Business’ operating expenses
• New Car
• Home Renovation
• Credit card Consolidation
• Stock Investment
• College tuition fees

Home equity loans are readily available in two types: fixed rate home equity loans and equity lines of credit. Both these types of home equity loans are easily available with loan terms ranging between 5 years to 15 years. Another significant similarity between these two types of home equity loans is their repayment method. The fixed rate home equity loans, as well as the equity line of credit, are required to be paid in full in case of selling of the home.

• Fixed Rate Home Equity Loans – Fixed rate loans are the first type of home equity loans that offer a single loan amount to the borrower at a fixed home equity loan rate. The borrower is allowed to repay the loan amount over a specific time period at an agreed interest rate. The repaid loan amount and the home equity loan rates remain the same throughout the home equity loan’s lifetime.
• Home Equity Line-of-Credit – This type of home equity loan is also referred to as a variable rate loan and it works very much similar to a credit card. In fact, some loan providers grant a credit card to the borrower with a home equity line of credit loan. This type of home equity loan offers a pre-defined spending limit to the borrower, and therefore, they can easily withdraw money via special checks or credit card whenever they need it. This home equity loan is required to be repaid through monthly payments. However, the monthly repayments depend greatly on the borrowed loan amount and the current home equity loan rates. Just like the fixed rate home equity loans, the home equity lines-of-credit is offered to the borrower for a definite term period. The loan amount is required to be repaid by the borrower at the end of the loan term.

A home equity loan is a great option to cover huge expenses associated with debt consolidations, home renovations, college tuition fees, and other major expenses. Home equity loans allow the borrower to obtain money against their home value. This type of loan is readily available and is easier to qualify because it is secured by the borrower’s house. There are many other amazing benefits offered by home equity loans. Some of them are listed below.

• Fixed Rate – Home equity loans are offered at fixed home equity loan rates and therefore, they are a great alternative to unsecured loans and credit cards. In today’s varying rate environment, a home equity loan with fixed home equity loan rates can offer simplicity to the borrower in terms of budgeting. The monthly payments of home equity loans also remain the same throughout the entire loan term.
• Lump Amount – Home equity loans offer a lump sum of the loan amount to the borrowers, thereby granting them the flexibility to cover their large expenses. You can easily apply for home equity loans with fixed interest rates and pay back the loan amount via fixed monthly payments. In case of selling your house, you will be required to pay the home equity loan amount in full.

Home equity loans are a perfect financial tool for responsible borrowers. So, if you have a steady income source, then you can simply apply for a home equity loan with relevant home equity loan rates and manGraphic design, images, and animationage your large finances in the best possible manner.