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Low Home Equity Loan - Getting a Low Home Equity Loan - What is a Low Home Equity Loan?

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In these times of economic depression, people are seeking ways to get quick cash in order to help them out of desperate situations. Personal loans are extremely hard to get and credit cards have such high interest rates, neither are the best solution for getting cash to pay off those bills piling up, and obtaining more high-interest debt is certainly no solution to paying off old debt. Fortunately, there is an option available to homeowners to get quick cash at affordable rates and low monthly payments. Low home equity loans are available now at some of the best rates in over 30 years.

What is a Low Home Equity Loan?

Home equity loans are based on the financial concept of equity. Equity is defined as how much your home is worth minus what you still owe on your mortgage. For instance, if your home is valued at $150,000, and you owe $100,000 on your mortgage, then you have $50,000 of equity built up in your home. Banks are willing to write loans based on the value of your equity. This allows you to put up your home as collateral so a lender knows you have an incentive to pay the loan back. If the loan goes unpaid, the lender has the authority to foreclose on your home just the same as in a first mortgage.

The current market, although still suffering from the economic downturn, has left real estate in a buyer’s market. This has lowered the interest rates on both first and second mortgages. While new homeowners may be suffering from a total loss of equity, those who built up equity before 2008, when the market turned, may still have equity available, which makes fortuitous enough to take advantage of a low home equity loan.

Which Type of Low Home Equity Loan is Right for You?

There are two types of home equity loans for relatively low interest rates: the traditional second-mortgage type of home equity loan and the home equity line of credit (HELOC). A HELOC loan is a form of revolving credit, like a credit card. This line of credit can be used for major purchases, to pay off old bills, thus fending off debt collectors, or to go toward school, home repairs, or anything else for which the money may be needed.

The best part about a home equity line of credit is that this type of low home equity loan continues on after you pay it back. As long as your credit remains in good standing, it remains available for future emergencies. The drawback of what today is a low home equity loan is that lines of credit are given at variable interest rates, so as the market stabilizes in the future and interest rates go up, your APR will go up with them.

Considerations in Obtaining a Low Home Equity Loan

Even though interest rates are favorable for a home equity loan, it does not mean that taking one out is a good choice. The first thing to consider is that there are some upfront fees. These fees may include the following:

• Property appraisal
• Application fees
• Up-front fees
• Closing costs
• Attorney costs
• Preparation fees
• Taxes

In addition to these fees that must be paid up front or are added to the balance of the loan, there may also be fees along the way. Maintenance and transaction fees are common. Because of this it is important to consider every aspect of a low home equity loan even if the APR is favorable.

Mattress New York - Getting a Mattress in New York - Mattress Sizes and Features, New York City Mattress Retailers - Mattresses and Locations [next] [back] No Credit Check Mortgage - Getting a Loan Without a Credit Check - Using Income and References to Obtain a No Credit Check Mortgage - Learn How to Find a No Credit Check Mortgage

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