Do you have something in mind that needs a considerable amount of money, like college education fees, major purchase, or home improvements? These kinds of expenses really need a large of money and the only thing you can do is use the equity in your home to borrow the amount you needed. Your home not only provides you shelter, but also help you in times of financial crisis.
Home equity loan is the most attractive tool in obtaining the amount you need. A fixed rate home equity loan is one of the types of home equity loans that allow you to get the full amount at the start of the loan and pay it down in equal payments for the term you selected. The good thing about this fixed rate home equity loan is that the monthly payment amount remains the same all throughout the term of the loan.
The fixed rate home equity loan has many different period lengths that it maybe required for. You may get a range of 5 to 30 years of loan terms. The shorter the term, the more savings you make. It is because, when you apply for a fixed rate home equity loan, the longer the term the bigger the interest rate becomes and the rate at the start of the loan will remain the same at the end of the term, where as in variable rate home equity loan, the rate may change depending on the PRIME RATE. If the PRIME RATE decreases, the rate of the variable rate equity loan also decreases.
Fixed rate home equity loan is best for homeowners who needed the money for one time use only. The advantages of fixed rate home equity loan is that the is tax deductible up to $ 100, 000, the interest rate are fixed, and you can borrow up to 125 % of you home’s value. This may sound so tempting, the large amount in which you can borrow, but don’t forget that your home is at stake.
If your purpose of applying for fixed rate home equity loan is to spend the money in something very important, then borrow only the amount that you need. That way, you will not need to be tied to this loan for long time and that there’s no chance that you will face the loss of your home.
The downside of fixed home equity loan can be: interest rates are usually higher than home equity line of credit, fixed end loan – means you can’t keep borrowing as needed, harder to qualify.
Whatever is in your mind that needs a great amount of money and you see that fixed rate home equity loan can be the best option, you might want to rethink again before making the final decision. Each type of home equity loans has advantages and disadvantages to help you weigh and decide what to choose. Study them carefully and don’t forget to shop around for lenders that offer the lowest interest rate.
For more information about home loans and home mortgages go to: http://Home-Loan-California.Info
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