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Home Based Business - Niche Marketing Opportunities Made Simple
By Leonard Bartholomew
There is an interesting area of internet marketing for the online home based business that is referred to as niche marketing.. While niche can mean different things, it is used here to indicate a Read more...
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How to sell your home to We buy Houses investors?
By Tim Mai
The first thing that you will need to do before you even consider letting anyone look at the home is to get it ready for sale. Start off by de-cluttering your home. If you can live without it, put it Read more...
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How to Increase the Value of Your Home Today
By Lorraine Weston
Selling your home can often be a stressful occasion. Everyone wants to make sure that they can sell their house for at least as much as they paid for it. Sometimes, people go to great trouble to fix Read more...
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Securing A Home Equity Loan
By Peter Kenny
If you own a home, then one way to free up extra money to consolidate debt or to make improvements is to take out a equity loan. A equity loan is money that you borrow against the money you have paid towards your property. The amount you can borrow depends on the level of equity that you have, which is determined by your property value minus the amount you have outstanding on your mortgage. The equity is used as collateral to obtain a loan, which is basically a second mortgage. Rates on these types of loans are slightly higher than normal mortgages, but still low compared to other types of loans.
Why a equity loan?
A equity loan has a number of advantages. Firstly, it can be used to get credit even if your credit rating is poor, because you are putting up collateral. Also, there are significant tax savings over normal loans as the interest paid on a equity loan is tax-deductible. Also, you can borrow a lot more money than you usually can through an unsecured loan. You could use your equity loan to consolidate your high interest debts, to make improvements or buy other costly items. However, before you get a equity loan you should look at the possible dangers involved, as some lenders can cost you a lot of money by not giving you all the facts. Here are some of the dangers of equity loans:
Equity stripping
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One problem that can occur with equity loans is equity stripping. If you get a loan knowing that you cannot make the monthly repayments, a lender might give you the loan anyway. The lender is not concerned if you make the payments or not, as they can simply take away the equity in your home. To avoid this, be honest with yourself and only take out a loan that you know you can afford, even if you get offered more.
Balloon payments
If you are struggling with your current payments, then a lender might offer a equity loan at a much lower price than you are paying right now. This may seem attractive, but it usually involves a hidden ‘balloon’ payment at the end. Your payments are lower because you are only paying the interest back, but at the end of the loan term you need to pay the amount in full. This is likely to leave you in financial trouble and you may lose your home. To avoid this, make sure that you can easily afford your monthly payments, and if you do have to refinance make sure you can afford the final payment.
Credit insurance
One of the most costly aspects of a equity loan is credit insurance. You have agreed to a loan that is within your budget, but the lender then adds on extra features that you do not need, such as credit insurance. These items can significantly increase the amount you pay back, and often cover you for a minimal amount of situations. Before you sign anything, check that the terms are for the loan payments only, and not for extra insurance. If you do want insurance, you can usually find it cheaper elsewhere.
If you decide to get a equity loan to consolidate your debts or free up some money, remember to look around for the best deals and to avoid signing anything that will cost you more money than you can afford.
For additional articles and an extensive resource for everything about credit cards and finance, please visit us at Compare Credit Cards and Mortgages UK
Visit www.creditcards-gb.co.uk
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