When it’s Time to Decide for a Home Equity Loan

A home equity loan is where the borrower provides his home equity as collateral for the loan. The equity of the home is determined by the market price of the house, not including physical possessions. Home equity loans are typically used for major purchases, like medical bills, tuition, or home repairs.

Home equity loans come in two forms, the first being a home equity term, where the rate is fixed, and a home equity line of credit, which is variable. It’s important to know the difference between the two, and when you’d require one over the other.

A home equity loan is available to those with bad credit, those who have declared bankruptcy in the past or are self-employed. One of the advantages of a home equity loan is that you can borrow up to 80% of your home’s equity, depending on how much you still owe on your mortgage. This type of loan allows you to make one small monthly payment throughout the term of your loan.

Many people choose a home equity loan if house repairs are required, or if they are looking to expand a kitchen, or add-on a den. Home equity loans are good solutions for these types of projects, and should always be considered as an option. Using your home equity loan to improve your home may increase its value in the long term.

Many parents will also look into home equity loans to cover tuition costs for their children. Education can be a huge expense for many families and a home equity loan can free up some money to spend on your children’s future.

Whether it’s a large purchase, household additions or tuition costs, it’s important to ask yourself if it’s worth taking out a home equity loan to achieve your goal. If you have any questions about Fast Access’ home equity loans, contact us today and we would be happy to determine whether you are eligible.