What is a Home Equity Loan?

A home equity loan is a loan that is guaranteed by your home. Are you in urgent need for cash and want to get the same without selling off your home or property? Getting a home equity loan is a good way to do so.

Equity on your home is essentially the difference between the value of your home and the outstanding mortgage. Lot of finance companies today offer good deals on home equity loans, letting you borrow money based on the available equity on your home.

This type of loans product basically works on the idea that you use the amount you own within your property as collateral against a loan. You put it up as a guarantee to your lender that you can repay any loans. This allows you to free up the amount you already own within your property and use it as hard cash.

Most lenders will work out how much equity you have for you - but it's simple enough to do it yourself. All you need to do is to work out how much your property is currently worth and then subtract your mortgage from it. If you're not sure how much is currently outstanding on your mortgage, have a chat with your lender and they'll be able to help you out.

A home equity loan allows homeowners to access the equity in their primary residence without having to sell the property. Equity is the difference between what a home is worth and what is owed against it. Traditionally, home equity loans were called second and third mortgages.

You might have heard about using these types of financing products to meet your financial goals. Most home equity loans are simply second mortgages, structured either as a lump sum loan similar to a first mortgage, or as a line of credit.

Home equity loans are also referred to as "Equity Release Scheme". The money you get on a home equity loan can be used for a variety of purposes such as to fund home improvement, buy a new car, consolidate your debts or finance a travel plan.

Home equity loans are particularly useful for the elderly. Elderly people can release the equity on their property and use the money to supplement their pension. This additional amount can be used to pay for the cost of residential care if they need it.

Home equity loans allow the elderly to borrow money at relatively low interest rate and with a low monthly repayment, thus easing the financial burden considerably in the old age. Under certain schemes there is no need to make a repayment at all. Depending on the equity in the home, these lenders simply reclaim the loan and interest by selling their house when they pass away or move on.

If you're looking to borrow money this is probably one of the easiest and most cost-effective ways of doing it. Lenders like giving out home equity loans because they know that they'll get their money back whatever happens.

This all means that you can get the most preferential rates and deals in comparison to other loan products. Another big advantage is that this is a way of freeing up cash that is already technically yours. Without any of the hassle or costs associated with moving.

The cost of the loan will depend on many factors including your personal circumstances, the amount you wish to borrow and over what period you wish to repay back the loan.

In a typical home equity loan, the home is used as collateral against the loan, meaning that should you be unable to maintain the loan repayments, your home will be at risk.

You may freely reprint this article provided the author's biography remains intact:

About The Author
John Mussi is the founder of Direct Online Loans who help UK homeowners find the best available loans via the http://www.directonlineloans.co.uk website.

---

10 Questions To Ask Your Mortgage Rep or Banke

This post is a must read for anyone considering purchasing... Read More

Home Equity Loans

A home equity loan allows you to cash-in on the... Read More

Basic Tips for First Time Home Buyers

The first time you purchase a home is an exciting... Read More

Refinance Your Home Mortgage Online

The largest financial obligation most people ever take on couldn't... Read More

Short-Term Interest Rates on the Rise; Adjustable Rate Mortgage Holders Prepare for Increase in Rate

Interest rates are on the rise and many home owners... Read More

VA Loans, A Gift from Uncle Sam

Uncle Sam has a gift for the men and women... Read More

Finding the Best Homeowner Loans for Your Money

Looking for the best homeowner loans can be stressful, especially... Read More

Jacksonville Florida Real Estate Mortgage Home Loans - Get the Best Rate Everytime

There are hundreds of mortgage companies in the Jacksonville real... Read More

Should You Get a Home Inspection?

It's very important, and in my opinion, mandatory to have... Read More

4 Things to Watch Out for When Choosing a Mortgage Company

We all know that there are a lot of mortgage... Read More

Reverse Mortgages ? a Reversal of the Mortgage Process

Mortgages have assumed a number of characters from the time... Read More

Zero Down Payment Mortgage ? Can It Be Done?

"I've been renting for years now; I've always paid my... Read More

How to Get Cheap Home Loans with a Bad Credit

It's been years since you made any major improvements to... Read More

This Secret Weapon Will Eanble You To Close Up To 200% more Home Remodel Sales

Many Homeowners are not aware of all the options that... Read More

Should You Refinance Your Mortgage if Interest Rates Drop?

Mortgage refinancing is when you take a mortgage of a... Read More

Carolina Mortgage Loans

You're selling your home and are looking to relocate to... Read More

Home Equity Loans 101

A secured home loan differs from an unsecured loan in... Read More

Bad Credit Mortgage Loans ? How To Get Approved

Persistence is the key working toward getting approved for a... Read More

How Much Home Loan Can I Afford?

Have you ever asked yourself how much home loan can... Read More

Home Equity Loan vs. 401(K) Loan -- Which Should You Choose

Home Equity Loan vs. 401(K) LoanYou've finally decided to add... Read More

Mortgage Refinancing Companies -- Choosing The Right One

Searching for a mortgage refinance company can be a daunting... Read More

An Infinity Mortgage?

Here in Spain the concept of a mortgage period of... Read More

New Home Loan - Understand The Various Types Of Mortgage Lenders

So, you've decided to buy a house, and you're ready... Read More

The Real Truth About Those: Online Get a Better Loan Web Sites - 6 Things to Look For

You have seen the Commercials on TV go this or... Read More

Uk House Price Increases Take A Summer Holiday

Property website Rightmove has released its latest house price index... Read More

Student Home Purchase Plan

Tuition costs are climbing, housing costs are climbing, it seems... Read More

Refinancing Your Home Mortgage Loan

You're considering refinancing your home mortgage loan to save money.... Read More

Mortgage Loans For People With Adverse Credit - How Much Should You Borrow

"How much should you borrow?" is a question people with... Read More

How Much Interest is Your Home Equity Earning?

How much interest are you earning on your home equity?... Read More

Why Choose a Home Improvement Loan?

Many people choose to take out home improvement loans so... Read More

Online Mortgage in UK - Introducing the Best Mortgage Plan Across UK

Add the term 'online' and it will open for you... Read More

Understanding UK Bridging Finance

Bridging finance, also referred to as "bridge loans" and "bridging... Read More

Remortgages Guide

Outlined below is a useful remortgages guide. Remortgaging has become... Read More