DO YOU NEED HOME EQUITY LOAN

A home equity line of credit is very closely related to a home equity loan but the subtle differences can mean a lot. Determining which option is the best for you relies upon you knowing your current situation and having a clear plan for what you wish to accomplish with the money.

A home equity loan is a lot like a mortgage. With a home equity loan you are able to borrow the amount of your homes value that you have already paid off. The benefits of this type of loan is that it is almost always guaranteed since it is based upon the amount of your home that you already own, the terms are almost identical to a mortgage and you receive the entire amount of the loan up front after closing.

While a home equity loan is also based upon the amount of your home that you currently own, the terms of the loan are very different. A home equity loan is basically a credit card where the limit is the amount of equity that you have in our home. Instead of receiving one large lump sum of cash, you will receive an overdraft type of service on your account that will allow you to withdraw as much or as little of the equity that you wish to use.

Which choice is better for you? The answer depends upon what you need the money for. With a home equity loan the monthly repayment schedule is known and the interest on your loan will be lower than most other types of loans. However, with a home equity line of credit, you have instant access to cash and the payments will vary depending but the interest will vary. With this in mind the question really becomes do you need access to a varying amount of money or one known lump sum of cash?

A lump sum of cash with a set repayment schedule is great for specific things such as debt consolidation or the funding of specific projects with a predetermined cost. If you are considering debt consolidation for credit cards or any other high interest loans a home equity loan is most likely a very good idea. You will be able to repay all of your debt and will only have to make one monthly payment at a lower rate of interest that you are currently paying on your cards and other unsecured loans.

Home equity loans also make perfect sense if you know the exact amount that you need to borrow. While it is always nice to have cash on hand it is often better to have more credit available to you. The more of your credit limit that you use up the higher the interest rates will be for you and the tougher it will be to borrow more money in the event of an emergency. It is definitely to your advantage to only be in debt for a specific amount to complete one project.

A line of credit option may be better depending upon what you wish to do with your money. While you will still use up a portion of your credit limit, the payments and impacts on your available credit may be lower. With a line of credit you always have the same amount of money available to you. As you pay off the amount of credit used, you can reuse that portion if needed without having to apply for another loan. Also your payments may be considerably lower since you are only paying on the amount of money that you have actually used, not the total amount borrowed.

As you can see there are some big differences between a home equity loan and line of credit. If you are looking at a single project, such as a new car or adding a pool to your home, a home equity loan is the better choice for you. However, if you are looking at starting up a new business, wish to travel or can not settle on predetermined amount money, then a line of credit is the better option for you. With a line of credit you can use as much of your credit as you wish whenever you wish and, much like a credit card, you can reuse the amount of the line of credit that you have repaid with out having to re-apply for a loan.

MORTGAGE IMPORTANCE

Mortgage amount

Original or expected balance for your mortgage.

Interest rate

Annual interest rate for this mortgage.

Term in years

The number of years over which you will repay this loan. The most common mortgage terms are 15 years and 30 years.

Monthly payment

Monthly principal and interest payment (PI).

Monthly payment (PITI)

Monthly payment including principal, interest, home owners insurance and property taxes.

Annual property taxes

The annual amount you expect to pay in property taxes. This amount is divided by 12 to determine the monthly property tax included in PITI.

Annual home insurance

The annual amount you expect to pay in home owners insurance. This amount is divided by 12 to determine the monthly home owners insurance included in PITI.

Total payments

Total of all monthly payments over the full term of the mortgage. This total payment amount assumes that there are no prepayments of principal.

Total interest

Total of all interest paid over the full term of the mortgage. This total interest amount assumes that there are no prepayments of principal.

Prepayment type

The frequency of prepayment. The options are: none, monthly, yearly, and one-time payment.

Prepayment amount

Amount that will be prepaid on your mortgage. This amount will be applied to the mortgage principal balance, based on the prepayment type.

Start with payment

This is the payment number that your prepayments will begin with. For a one time payment, this is the payment number that the single prepayment will be included in. All prepayments of principal are assumed to be received by your lender in time to be included in the following month's interest calculation. If you choose to prepay with a one-time payment for payment number ZERO, the prepayment is assumed to happen before the first payment of the loan.

Savings

Total amount of interest you will save by prepaying your mortgage.

ADVANTAGE OF HOME EQUITYLOAN

Here are some reasons why equity home line is attractive to many borrowers:

1. Interest rates are typically low with this specific type of revolving credit.

2. There are big chances of tax deduction on equity home line payments, which minimizes the chance of extra expenditure.

3. You can qualify for these, even with a poor past credit report.

4. Here you can get a large credit for purposes like reconstruction of your home, to pay tuition fee of your chidren or to consolidate high rate debts, which are creating headache to you.

REFINANCING

In this life, if one thing's for certain, it's that nothing is certain. The purpose of having savings is to provide for the future, which is unknown. There are undoubtedly going to be "bumps" along the road of life that can't be foreseen. Whether the "bumps" are associated with the loss of a job, relocation, medical problems, etc. they have to be dealt with. The ability to refinance is often a solution to one or all of the "bumps" we encounter. Refinancing is not, however, solely associated with the negative externalities of life. A surge in income might present the opportunity to refinance one's property so that it is paid off years before it previously would have been. Refinancing is a tool through which moneys can be reallocated so as to better an individual's monetary position as it fluctuates.

REFINANCING EQUITY LOANS

For homeowners, it seems that there is always more work that need be done to keep their property in its best possible condition. Home improvements can be costly and extensive, but they continuously need to be done. There are some small projects that can be handled via the simplicity of a credit card or personal loan, however, for larger, more costly projects it makes sense for homeowners to utilize the equity that their home generates to get a further loan from their creditor. Once you have agreed upon a home equity loan with your creditor, as it happens with other loans, the interest rates will continuously fluctuate over time, possibly up, possibly down. When the interest rates drop, homeowners can choose to refinance their equity loan in order to take advantage of the generated savings.

HOME EQUITY LOAN

There is a great deal of responsibility that comes with the territory of becoming a homeowner. You must pay close attention to the current rates and look to refinance your mortgage when it can save you a great deal of money. Another, more basic responsibility, comes with the upkeep of the home itself. Over time, homeowners are going to need to make repairs, renovations, adjustments, improvements, or additions to their aging property. Home equity is designed specifically for such a purpose. Home improvements are usually costly to the point that it no longer makes economical sense to use a simple credit card or personal loan to finance the work. Through utilization of your property's equity, you can receive a percentage from your creditor through which they can make the necessary home improvements or additions. To a certain extent, equity loans are also deductible from Federal Income Tax. For expensive improvements, a home equity loan is the smart choice for the savvy borrower.

HOME LOANS

A home loan is in essence a mortgage, through which property can be purchased and paid for over the course of a pre-determined time frame. In this expensive, consumer driven time that we are living, mortgages can allow for a certain degree of elasticity in your wallet. That is to say that it can help you stretch out the money that you have, and account for the money that you someday expect to have. There are those amongst us who have the money to purchase a property outright, avoiding the compiling interest costs associated with a home loan, however, such fortunate souls are few and far between. The rest of us are required to get a mortgage that allows the price of the property to be broken up into more reasonable figures that can be dealt with on a month-to-month basis.

COUNTRYWIDE HOME LOAN

Countrywide Home Loans, Inc. is the nation's largest independent residential mortgage lender. With an 11,000+- person workforce, they are without a doubt and industry leader when it comes to loans. Helping millions of people every year find the right plan to best fit their needs, Countrywide Home Loans takes all the confusion out of buying a house. Offering a wide range of mortgage plans via their no-nonsense advisors, this mortgage company offers loans of up to $2 million and take you step by step through the entirety of the process of purchasing a house. For first time buyers, Countrywide Home Loans provides all the information needed to gain a full understanding of the market.

For a detailed description of the rates and plans available through Countrywide Home Loans, Inc. continue to their homepage: http://www.countrywide.com

COUNTRYWIDE MORTGAGE

When it comes to understandingrefinancing , Countrywide Home Loans, Inc. is the leader in the industry. They work with real estate their agents and clients so as to find the best home to fit the differing price ranges of said clients. Their 11,000+ dedicated workforce will help you to better determine your price range, protect your mortgage's interest and pre-approve your loan. Between their quality customer service and their excellence in the industry, Countrywide is the smart choice for the smart homeowner.

To get pre-approved for a mortgage loan today, visit Countrywide Home Loans, Inc. at: http://www.countrywide.com

CHASE MANHATTAN MORTGAGE

With offices located in more than 50 countries around the world, JP Morgan Chase & Co. is a leader in global financial services. Headquartered in New York, JP Morgan Chase & Co. delivers financial services to more than 30 million individuals across the United States. The house loans sector of JP Morgan Chase, operates under the Chase brand name, and provides clients with no-hassle service in the search for their perfect home. Chase provides the client with everything they need to know about purchasing a home, and finding the mortgage that best fits their unique situation. Taking the "big picture" into consideration, Chase helps its clients account for their current financial status, and plans for their future financial status resulting in a custom mortgage plan that works for the individual.

Get the perfect mortgage plan for you! Visit Chase at: http://www.chase.com

CURRENT MORTGAGE RATES

View the mostcurrent rates for mortgage. This serves to keep the public aware of the state of their personal mortgage, and could also serve to signal a time to refinance, seek out equity loans, consolidate debts, or get a second mortgage. For others, it could signal a good time to purchase a home.

Interest rates are currently beginning to rise, however, making it a good time to consider refinancing your mortgage, purchasing a home, getting a home equity loan, consolidating your debt or getting a second mortgage.

gmac mortgage

Before you refinance or commit to a house loan,check out GMAC mortgage. One of the largest mortgage brokers in the world, General Motors Acceptance Corporation (GMAC) caters to millions of customers every year. GMAC Mortgage is a subsidiary of GMAC and offers a plethora of differing rates so as to provide their clients with the perfect fit for their specific needs. Whether you are a first time buyer, or purchasing a home for the third time, GMAC Mortgage has the answers to the inevitable questions. With its sister company, GMAC Real Estate, GMAC Mortgage has all the tools and answers needed to match its clients with the home that's right for them. GMAC Mortgage doesn't want you to simply settle for a house, it wants to put you in your dream house and it has the wherewithal to make it happen.

Let GMAC Mortgage turn your dreams into reality. Visit GMAC Mortgage at: http://www.gmacmortgage.com

HOME MORTGAGE RATES

Mortgage rates reflect the level of interest that you are paying per month on your mortgage. The current interest rate for a 15-yr. fixed payment plan is 5.44%. The interest rates differ according to time frame and have a tendency to fluctuate quite often. It is important to pay attention to rates because they are prone to dictate further activity on your mortgage. That is to say, when interest rates are low, people are going to be more prone to refinance their mortgage, get an equity loan, consolidate your debts or purchase a home. Similarly, when the interest rates are high, people will be less inclined to change their mortgage plan.

HOME MORTGAGE

With a booming real estate market, it's getting more and more expensive to purchase a home. Young couples/families in need of a home can rarely afford to pay the total value of a house in one payment. Because of the great expense and the even greater demand, loans are made available through which homes can be made affordable, regardless of credit history. It isn't too difficult to get a home loan these days since the great demand paved the way for a huge supply of financial institutions willing to make a payment plan work for those seeking a home.

There are many different payment plans that borrowers can choose from, so as to best fit their unique position. Monthly payments are made, plus interest, over the course of a pre-determined time frame through which the loan is paid back. As interest rates constantly fluctuate, borrowers have the option to refinance their mortgage so as to reap the rewards that the newfound savings produce.

MORTGAGE REFINANCING

The motivation that lies behind homeowners choosing to refinance their mortgage is born out of a want to save money. Whether refinancing your mortgage in effort to consolidate debt or reduce monthly payments, the ultimate goal is simply to line your pockets with a little bit more money each month. When current rates drop to lower prices, it has the potential to save you a lot of money if you make the decision to refinance.

MORTGAGE REFINANCE

In terms of refinancing when it comes to mortgages, there are 3 main factors to be considered:

1. Debt Consolidation: In the case of debt consolidation, the object is to unite debts into one system. In an age where consumer spending is dominated by credit, the average credit card or personal loan has an annual percentage rate of 18-22%. By consolidating the credit card payments with the loan, consumers are freed to use their savings for other purposes.

2. Lowering Interest Rate and Loan Term: Simply stated, lowered rates breed lower payments. In some cases such a lowering of payments produces a domino effect in which homeowners are able to reduce their loan term, keeping their payments as reasonable as possible. Lowering both the monthly principal and interest payments puts you in a situation to add the recognized savings to your payment, going directly to the principal. Any payment made that is extra from the minimum amount due helps to pay the loan off much faster, possibly saving thousands of dollars in the process.

E.G:

Jon takes out a house mortgage loan of $80,000 at 12% interest to be paid over the course of 30 years. Jon's monthly principal and interest payment is $822. If Jon were to add a dollar a day to his payments, he would pay off his loan faster and save thousands of dollars in interest. If Jon were to add $31 on top of the monthly mortgages in the given scenario, he would pay off his debt 7 years earlier and save approximately $58,828.

3. Cash Out: In a booming real estate market, homeowners would be wise to further the appreciation of the value of their property. To do this, homeowners refinance in effort to gain the money needed for the allowance of home improvements. A low home interest rate provides more "bang for your buck" than does a high interest credit card or personal loan.

REFINANCE

In general, mortgages are paid over the course of a pre-determined time period through which one is contracted with the creditor. Throughout this pre-determined time period, lowered rates often result in the decision to refinance the initially agreed upon mortgage contract so as to reap the rewards of the newly established lowered rates. Such a degree of flexibility allows somebody the option to save a great deal of money when interest rates are low. Maybe it's time for you to refinance.

MORTGAGE INTEREST RATES

Simply stated, interest rates describe the level of interest that you will be paying on your loan on a month-to-month basis. The rates are known to fluctuate quite often, so paying careful attention to the changes in the mortgage rates will help facilitate the decision processes associated with having a mortgage. I.e. when rates are lower, it signals a good time to purchase a home, consolidate your debt, refinance your mortgage, get an equity loan or purchase a second mortgage. As interest rates rise, on the other hand, you might want to hold off on any such changes to your plan.

HOME MORTGAGE CALCULATOR

Interest rates are continuously fluctuating from highs to lows. When the current rates are low, the savvy borrower will look to refinance their home loans so as to save money on interest payments. The question is, how do you find out if it's worth your while to refinance? A mortgage calculator is a tool that allows the borrower the ability to formulate all sorts of payment scenarios so as to find the best fit for their unique monetary needs. Adjusting the time frame, the mortgage interest rate, and the value of the loan, you can postulate and plan for changes that may occur. This helps you to plan ahead for a drop in interest rates, so as to immediately pounce of the savings it can produce. The most agreeable distribution of payments can be found for every borrower through the flexibility of a mortgage calculator.

MORTGAGE PAYMENT CALCULATOR

The payment calculator is an invaluable tool that is utilized for the sole purpose of analyzing every mortgage option available before committing to any one plan. This tool is designed around the obvious fact that different homeowners are going to require different payment plans considering their differing incomes and differing social status. Through the utilization of a mortgage payment calculator, you can come to terms with the type of loan that is most affordable for you, whilst establishing the perfect payment plan for your loan.

When it comes time to refinance your loan, a mortgage calculator can be of invaluable service, as it allows you to search for the most affordable distribution of payments.

MORTGAGE CALCULATORS

In the simplest of terms, a payment calculator is a tool that is utilized to assist you with every mortgage option available. Different people have different needs, and a calculator helps to take such diversity into account. The calculators allow you to "play around" with different loan amounts, interest rates and time frames, to give you a better idea of what best fits your unique needs. Through the utilization of such tools, everyone has the ability to seek out their own perfect plan. A calculator also comes in handy when it comes to refinancing your loan. Through the process of trial and error, they allow you to come to terms with all your available payment options.

MORTGAGE CALCULATOR

Loan calculators are quite simply a series of mathematical tools designed to help you understand every mortgage option that is available for use. Different people's monetary situations require different payment plans. Mortgage calculators help you find the best mortgage plan based on your unique needs. Mortgage calculators are also invaluable tools through which you can plan any type of refinancing that you may find yourself in need of. When mortgage rates drop, loan calculators help you to see the amount of money that can be saved through refinancing.

Example:

Jon is in need of an $80,000 loan to be paid back over the course of a 30-year period. Jon cannot afford to pay more than $600 /month in payments. With the assistance of a home calculator, Jon can determine that he cannot afford a plan with anything higher than an 8.2% interest rate. Otherwise he would exceed his $600 /month limit.

MORTGAGE LOANS

Fixed and Adjustable Rates

There are numerous loan programs for borrowers to consider. The two most common programs are those of fixed and adjustable rates. For all individual scenarios, there exists a beneficial program that will complement it. In some instances, this amounts to a combination of both fixed and adjustable rates. The difference between a fixed rate and an adjustable rate is quite simple:

In the case of fixed rates, the level of interest remains constant. As for adjustable rates, the level of interest (surprise, surprise) is capable of adjusting every six months. The advantage in choosing a fixed rate is that the level of interest can never rise above its initial rate. The advantage in choosing an adjustable rate is that the level of interest for these programs is discounted, and can, in effect, save you a great deal of money.

"HELOC's"

Fixed and adjustable programs, although the most popular, are not the only one's to choose from. Choosing a home equity line of credit (HELOC) can be advantageous for those who are responsible borrowers, and can be more or less compared to a credit card. There is a "draw" period during which the credit on the loan is available to the borrower. During this "draw" period, the borrower has a great deal of flexibility and control over the amount of money he/she wishes to borrow. The borrower can choose to use the full balance of the credit line, or simply use funds as needed. As payments are made, the line of credit is restored and available for the borrower to use again. The reasons for utilizing a home equity line of credit range from debt consolidation, refinancing and home improvements, to education, investments, entertainment and vacations.

Balloon Program

Another mortgage program to consider is a balloon program. A balloon program are mortgage loans with monthly payments that will be liquidated over a stated time frame. Once at the end of the agreed upon time frame, the balloon payment will be due requiring a lump sum of the remaining balance of the loan. It is common to refinance a balloon program at the maturity.

"Credit Comeback / Credit Repair"

A "credit comeback," also referred to as a "credit repair" program is set up in such a way as to assist borrowers with previously late mortgage payments. The program is designed to offer borrowers the opportunity to lower their interest rate by .375% every year for the first 4 years of their loan when they make their previous 12 payments on time. The beauty of this program is that your interest rate cannot be raised, but can be lowered up to 1.5%.

MORTGAGE LOAN

It's basic economics that if there exists a high demand for a given product, then those who own said product, will seek to supply the want. Such is the case with the great demand to own a home. Because of the great demand, there are now an incredible amount of financial institutions that offer plans through which the demand can be recognized. Prospective homeowners shop around to find the best payment plan that fits their specific needs. The home loan is broken up into monthly payments with pre-determined rates. As interest rates fluctuate to a lower percentage, homeowners find themselves in the position to refinance their plan so as to recognize the savings produced by the lowered rate. Loans provide those with the tightest budget, the ability to purchase the home of their dreams.

MORTGAGE RATES

Currently, the rate for a 30-yr fixed payment plan is 6.13%. This tells you the amount of interest that you would be charged if you had a 30-yr fixed payment loan plan. These quotes differ according to your specific payment plan, and fluctuate quite often. Paying careful attention to the changes in current rates clues you in to knowing when it's an appropriate or advantageous time for consideration of such things as refinancing your loan, purchasing a home, getting an equity loan, consolidating your debt or even getting a second mortgage. When interest payments drop, thousands of dollars in can be saved if the savvy homeowner chooses to refinance.

MORTGAGES

Mortgages can simply be thought of as temporary contracts through which one party pledges payment to another party over the course of a pre-determined time frame, in exchange for some form of property. In short, the house serves as collateral until the debt is paid. Contracts allow for the total cost of a property to be broken up into monthly installments. In terms of purchasing a home, costs can range from tens of thousands to hundreds of thousands to millions of dollars. There aren't too many people who have it within their means to make such an expensive purchase, so payment is broken down, and a mortgage is drafted through which they are contracted to their creditor. Monthly payments make it manageable for almost anyone to purchase a home by matching a payment plan that best suits the client.

MORTGAGE

The term "mortgage" hales from the Old French words, mort, meaning "dead," and gage, meaning "pledge." It is translated to represent the doubtfulness of whether or not a debt will ultimately be paid. That is to say, if the property is not paid for in full, then it becomes "dead" to the mortgagor. (He has no claim to it) However, once the debt is paid in full, then the pledge from the mortgagor is said to be "dead," or completed.