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Home Equity Loans - There's Gold In That There House
To paraphrase an old familiar quote that goes "there's gold in them there hills, you could say, there's gold in that house. As Martha Stewart would say, "it's a good thing".
A home equity loan can be a very good thing if you formulate a plan and stick to it. Home equity loans are becoming much more common and most banking companies have specific re-financing plans available for today's consumer.
Read on and you will see that a home equity loan used for the proper purpose and managed correctly can indeed be a "good thing".
A Home Equity Loan - Just what is it?Types Of Home Equity Loans HEL or HELOC?
There are two types of home equity loans. A regular home equity loan and the home equity line of credit or HELOC. A regular home equity loan is a fixed sum borrowed at a fixed rate over a period of time. A HELOC allows the client to borrow various sums up to a fixed amount over a period of time. A line of credit works in a similar way as a credit card; you use it when you need it. Different States set their own laws on limits you can borrow against your house.
The Financial Plan - Making your home equity work for you
For a home equity loan to work best for you, it's a good idea to have a budget and a financial plan. Having a budget will help you decide how big a loan you need and a financial plan will be the map to accomplish your goals within that budget. Here are a few suggestions on ways to use a home equity loan.
1. Home Improvements
2. Debt Consolidation
3. A holiday in the sun or snow!
Mexican or Caribbean destinations are very attractive during the winter months but if skiing and winter activities is more to your liking then consider Vancouver, Canada. Whistler, British Columbia is one of the locations that will host the 2010 Winter Olympics. Shop around for the best rates and dream on.
4. A retirement Savings plan
Loan Terms - Points To Ponder
Now you have a plan and are ready to talk with a lending company. You may want to do this on the Internet to save time and maybe a few dollars. If that is the case then it is a must to know these terms. Before you proceed to do some serious web surfing here are a few you will want to become familiar with before you consider a home equity loan. These points to ponder are:
Debt Consolidation Loan
Re-Financing - Finding A Gold Mine In Your Home
Many people consider their home to be their castle but few consider that they could be living on a potential gold mine. If you have lived in your house for 10 years and have been making payments, especially bi-monthly payments, you have built up a considerable amount of equity. Pair that with a good FICO score and there is indeed gold in that there house.
What's Your Fico?
Mortgage Brokers use a FICO scale to determine the amount of money you can borrow against your home and at what interest rate you can borrow this money. This number is between 300 - 850 points and showcases a person's credit history. This scale was developed in California by the Fair Isaac Corporation, a global decision management company. A credit rating of 700 points is considered "good" and based on a $150,000.00 fixed thirty year mortgage, your rate of interest would be 5.7 percent VS 9.3% if your FICO score was below 600 points. Having a high FICO entitles you to borrow more money at a better rate.
Improving Your Fico
You've taken the test, (which is available at most lenders websites), and your score is not as stellar as you had hopped it would be. There are a couple of ways to improve this score:
1. Pay all your bills on time.
The FICO website gives you all the "who, what, where, when and why" of the two above suggestions. You can read about the rationale in great detail at that site.
With today's credit options and a good credit rating, you can borrow a lot of money against your home. This ability if not used responsibly and with a good solid financial plan can be ruinous. Some borrowers have gotten over their head and ultimately had to file for bankruptcy. So beware of potential risks.
Home Equity Loans - A Golden Opportunity
As you can see, a home equity loan is a great way to improve your living space, go on a holiday, plan for retirement or pay off some debts. With the right combination of a good FICO score and proper planning, there really is gold in that there house.
About the Author
MORE RESOURCES updated Mon. August / 02 / 2021
Can I Refinance My Mortgage With Bad Credit? Motley Fool
Low Appraisal: Why It Happens and How to Avoid It Credible News
Mortgage Rates Hit a New 5-Month Low at 2.88%. Why the Lowest Rates You See Aren’t What You’ll Get - NextAdvisor
Mortgage Rates Hit a New 5-Month Low at 2.88%. Why the Lowest Rates You See Aren’t What You’ll Get NextAdvisor
KNOWLEDGE CENTER: Feeling left out of the housing market boom? Why refinancing your current home may be a better option [Column] - The Mercury
KNOWLEDGE CENTER: Feeling left out of the housing market boom? Why refinancing your current home may be a better option [Column] The Mercury
New Biden mortgage relief plan cuts payments by 25% A new mortgage relief plan from President - The Mortgage Reports
New Biden mortgage relief plan cuts payments by 25% A new mortgage relief plan from President The Mortgage Reports
Ally Home launches RefiNow™ to provide greater access to mortgage refinance options for homeowners - PRNewswire
Ally Home launches RefiNow™ to provide greater access to mortgage refinance options for homeowners PRNewswire
How A Mortgage Refinance Can Benefit Homeowners - With Rick Ripma, The "Hard Working Mortgage Guy" - Yahoo Finance
How A Mortgage Refinance Can Benefit Homeowners - With Rick Ripma, The "Hard Working Mortgage Guy" Yahoo Finance
3 ways credit plays into mortgage refinancing Mountain Democrat
How to remove PMI from your mortgage Fox Business
Concern over foreclosure increases after forbearance ends 'wildly overestimated,' expert says - Fox Business
Concern over foreclosure increases after forbearance ends 'wildly overestimated,' expert says Fox Business
NACA Home Buying Program | What it is and how it works The Mortgage Reports
Battle of the Titans dbusiness.com
Mortgage Refinance Options & Types | Refinance Chase News & Stories
How to refinance a mortgage | Mortgage Chase News & Stories
Mortgage rates: Despite low-interest rates, not all homeowners are refinancing. Should you refinance now? - USA TODAY
Mortgage rates: Despite low-interest rates, not all homeowners are refinancing. Should you refinance now? USA TODAY
Mortgage Rates Are Rising. Read This Before You Refinance. The Wall Street Journal
7 Steps for a Successful Mortgage Refinance Business Insider
Today's mortgage refinance rates all trend upward for first time since mid-March | June 30, 2021 - Fox Business
Today's mortgage refinance rates all trend upward for first time since mid-March | June 30, 2021 Fox Business
Best mortgage refinance lenders in 2021 Bankrate.com
A record 19.4 million homeowners can now save big on a mortgage refinance, as rates hit another new low - CNBC
A record 19.4 million homeowners can now save big on a mortgage refinance, as rates hit another new low CNBC
15 of the best mortgage refinance companies for 2021 Fox Business
Today's mortgage refinance rates see little change as market holds steady | April 1, 2021 - Fox Business
Today's mortgage refinance rates see little change as market holds steady | April 1, 2021 Fox Business
New mortgage refinance program for lower-income homeowners opens The Seattle Times
Refinance Terms & Rates | Refinance Chase News & Stories
Mortgage Refinancing Initiative to Help Lower-Income Borrowers The Wall Street Journal
Today's mortgage refinance rates: 30-year rates plunge below 3% for the first time in 34 days | April 16, 2021 - Fox Business
Today's mortgage refinance rates: 30-year rates plunge below 3% for the first time in 34 days | April 16, 2021 Fox Business
Fannie Mae’s refinance program for lower-income homeowners starts next week. Here’s what to know - CNBC
Fannie Mae’s refinance program for lower-income homeowners starts next week. Here’s what to know CNBC
Current 30-Year Refinance Rates for August 2021 NextAdvisor
Jumbo Mortgage Refinance Rates for July 2021 NextAdvisor
Should you refinance your mortgage in 2021? Bankrate.com