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Posted:
By:
Bob Buckham
Website: http://www.best -choice-loans.com
Home equity loan: Your walls are loaded with money
There is money in “them-thar-walls”. Ever done a renovation on an old house, and after tearing down a wall, find thousands of dollars hidden behind the drywall. Believe it or not, I had a friend who found $10,000 hidden in a wall when he was tearing it down. He didn’t feel guilty because his grandma had “willed” him the house, so the money was his anyway. He thanked her in a prayer and the money paid for the renovation.
This is an unusual situation, but in fact, you may even have more than $10,000 in your walls. It’s called equity, and you can withdraw it in a Home Equity Loan.
How much you can take out depends on the value of the home minus what you owe on it. For example, many lenders will set the amount of your home equity loan by taking a percentage (say 75%) of the apprasied value pf the home and subtracting the balance owed on the existing mortgage.
Assume
Appraisal of home $100,000
Percentage x75%
Percentage of appraised value $75,000
Less mortgage debt -$40,000
Potential credit line $35,000
A Home Equity Loan can allow you to consolidate debt, finance a new business, pay off high interest credit cards, improve your home or simply get cash to buy a car or go on vacation. Home Equity loans are generally tax deductible so you may save on your taxes also.
The costs of obtaining a Home Equity Loan are similar to getting a regular mortgage. There is the standard fees for property appraisal, loan application, title and escrow search, etc.
To get your application costs and interest rates as low as possible, shop around, because lenders are always trying to be competitive in this field.
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