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Be Prepared With Your Home Equity Loan Checklist
A home equity loan can be an excellent way to obtain money in
order to pay off high interest bills or consolidate your current
debt into one monthly payment. A home equity line of credit is a
form of revolving credit in which your home serves as collateral.
Because the home is likely to be a consumer's largest asset, many
homeowners use their credit lines only for major items such as
education, home improvements, or medical bills and not for
day-to-day expenses. Additional benefits include a nice tax
advantage and the possibility of an overall lower monthly
payment. However before you decide that a home equity loan is
right for you make sure you do your homework.
Not all online lenders of home equity loans are the same which
means there are ample opportunities to save a few more of your
hard earned dollars.
The biggest obstacle to overcome is deciding on the
appropriate online loan lender. Make the wrong choice here and it
could come back to haunt you in the form of higher payments. I
have compiled a small list of items to check for when searching
for the best online loan lender. One item to be on the look out
for is the annual percentage rate or (APR) as it's commonly
known. This is the cost of credit on a yearly basis expressed as
a percentage. This cost is based on the interest rate alone and
will not take into effect other fees and charges such as closing
costs.
Most home equity loans or lines of credit revolve around
variable interest rates. In many cases lenders entice consumers
with an offer to temporarily discount interest rate for home
equity lines. This rate is unusually low and may last for only an
introductory period, such as 6 months.
Typical information that a loan officer will ask you to
provide include a checklist for "Full Document" loan approvals, 1
month of pay stubs from your employer, the previous 2 years worth
of W2 forms, a mortgage coupon or copy of your monthly mortgage
statement, your homeowners insurance policy information, the
mortgage note on your current mortgage, your drivers license and
social security card. Having these items handy will help speed up
the loan approval process.
Remember those pesky closing costs when you first bought your
house? Well there back in force when you apply for a home equity
loan. They include but are not limited to the following: Up-front
charges, such as one or more points (one point equals 1 percent
of the credit limit), application fees, appraisal fees and
closing costs, including fees for attorneys, title search, and
mortgage preparation and filing; property and title insurance;
and taxes.
Once recommendation before applying for a loan would be to
have a plan in place describing how you intend to pay the loan
back. Some plans set minimum payments that cover a portion of the
principal plus accrued interest. Other plans may allow payment of
interest alone during the life of the plan, which means that you
pay nothing toward the principal. If you borrow $10,000, you will
owe that amount when the plan ends. You'll need to be aware of
the possibility of a balloon payment. This means whatever your
payment arrangements during the life of the plan--whether you pay
some, a little, or none of the principal amount of the loan--when
the plan ends you may have to pay the entire balance owed, all at
once. Failure to complete the loan arrangement by making the
balloon payment could result in the forfeiture of your house.
Finally the federal Truth in Lending Act requires lenders to
disclose the important terms and costs of their home equity
plans, including the APR, miscellaneous charges, the payment
terms, and information about any variable-rate feature. You
usually get these disclosures when you receive an application
form, and you will get additional disclosures before the plan is
opened.
These simple guidelines were meant to provide you some
additional information with the hopes of making you more
comfortable and aware of the issues involved when applying for a
home equity loan. Timothy Gorman is a successful webmaster and
publisher of Military-Loans-Online.com. He provides more free
loan information that you can research in your pajamas and money
saving loan quotes on all of your loan needs to include
home equity loan information.Other websites operated by
Tim
Cellular-Phone-Solutions.com - Free information and resources
regarding cell phones and cell phone
plans. Best-Free-Insurance-Quotes.com. - Provides free
insurance information and offers discount home, life and
auto
insurance.
 MORE RESOURCES updated Thu. February / 09 / 2012
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Why Choose a Home Equity
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There are many reasons for choosing a home equity loan. A
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Insurance
In decades past, most people who were interested in
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When the time comes to do work around the house, finding
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need and to hire the professionals that can get the job
done.
Refinancing Your
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Refinancing a mortgage is simply taking out a new mortgage.
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Chances are you may need a little extra money to get some
work done around the home or perhaps your current interest
rate is 7.5% and the prime interest rate is 6.
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