Home Equity Loan Line of Credit
What's the difference between home equity loan and line of credit?
With both you can tap the equity in your home. Actually home equity
loan is a second mortgage: a mortgage on an existing mortgage. Reason?
Low rates.
Home equity line of credit works like a credit line - its operation
resembles a charge card, like Visa or MasterCard. Commonly, most lines
feature an "open" or "advance" period where you
can borrow money, followed by a "repayment" period where
your access is closed off, and any money you still owe must be repaid.
However, there are some which are truly open-ended, and like charge
cards, they don't have a fixed term, but can last for as long as you
own your home. Home equity loan line of credit are almost always variable-rate,
tied to the Prime Rate plus some margin, with at least a lifetime
`cap` on rate movements.
What is home equity loan line of credit?
A home equity loan line of credit can be a useful source of funds.
When your good money is not sufficient to meet expenses such as home
improvements, medical treatment, car repair etc, home equity loan
line of credit can become a handy option. It is simply a revolving
letter of credit with your home serving as a collateral security.
The pros and cons of home equity line of credit should, however, be
examined carefully before going for it.
Home equity loan line of credit - Some basic aspects:
Credit Limit
Home equity line of credit lenders will determine your credit limit
depending upon your credit worthiness – which is again related
to your income, debts, and other financial obligations as also your
credit history. However, lenders usually set the limit at 75% of the
home’s apprised value minus the balance owed on the existing
mortgage.
Repayment Period
Many home equity loan line of credit plans set a fixed period –
say 10 years during which you can borrow money. You are permitted
to renew the credit line at the end of this “draw period”.
Some plans may require payout in full of any balance outstanding at
the end of the period whereas others may allow repayment over a fixed
period.
Mode of Payment
You will be able to borrow up to your credit limit whenever you want
once a home equity line of credit is approved for you. Special checks
can be used to draw on your line or, as some plans allow, you can
use a credit card or other means to draw on the line. However, some
plans may require you to borrow a minimum amount each time you draw
on the line or even require that you take an initial advance when
the line is set up.
Home equity loan line of credit - the features you should look for:
Variable interest rates, rather than fixed interest rates are commonly
charged for home equity loan line of credit. The only redeeming part
of the variable interest rate is that it must be based on a publicly
available index (such as the prime rate published in some major daily
newspapers or a U.S. Treasury bill rate).
Variable-Interest rate ceiling
To much relief of borrowers, the law puts a ceiling (cap) on how
much interest may increase over the life of the plan. However, some
lenders allow you to convert from a variable interest rate to a fixed
rate during the life of the plan or to convert all or portion of your
line to a fixed rate installment plan.
Costs of availing home equity loan line of credit:
The following costs may have to be borne normally by you for availing
home equity loan line of credit.
(a) A fee for a property appraisal to estimate the value of your
home
(b) An application fee, which may not be refunded if you are refused
credit
(c) Up-front charges, such as one or more points (one-point equals
1 percent of the credit limit)
(d) Closing costs, including fees for attorneys, title search, and
mortgage preparation and filing
(e) Property and title insurance and taxes.
Repayment Plan
A prudent borrower must know his repayment schedules before availing
home equity line of credit. Some plans require payment of interest
and a part of the principal whereas others provide for paying of interest
only.
Since home equity loan line of credit plans usually ask for full
recovery of loan advanced in case the borrower decides to sell his
home, it is better you consider whether it would be worthwhile to
bear all the costs of setting up a line of credit if you are likely
to sell your home in the near future.
>> E-LOAN, Inc.:
E-LOAN
offers home equity line of credit (HELOC) for people with bad credit.
Loans are offered at lowest rates and personal service is given in
a secure and private online environment. They provide different options
on home equity: Lines of Credit, Fixed Loans, or 125% Loan.
Very Fast Approval. You can also get a free credit score to
check your rating.
E-LOAN
is licensed in all 50 states. Bad or no credit is accepted. As seen
on TV.
Note: There are no lender fees, or origination fees and no hidden
costs. Loan decision is taken in less than 10 minutes. Streamlined process
means less paperwork. Expert one-on-one service is given.
Guaranteed
lowest cost Home Equity Loans - Get Up to 125% of Your Home's Value
>> Money Nest:
This mortgage
company offers bad credit home equity loans as well as home equity
line of credit loans.
When you
fill up their bad credit home equity loan form, they will give you a
free, no-obligation quote from a selection of 600+ competitive
and trusted lenders in their network. The result is that you end up
paying the lowest interest rate. Most loans are approved in 1
day. Residents of all states of the US are eligible.
Click here to apply for a bad credit home equity loan
www.free-credit-reports-mortgages-calculator-debt-home-equity-loans.com
- We provide lists of cash out online brokers including low rate
financing companies, low mortgage refinance, bad credit line companies
and second house purchase lenders.
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More Information:
State Banks that Are Members of the Federal Reserve System
Division of Consumer and Community Affairs
Mail Stop 801
Federal Reserve Board
Washington, DC 20551
(202) 452-3693
www.federalreserve.gov
Federally Insured State Non-Member Banks and Savings Banks
Federal Deposit Insurance Corporation
Consumer Response Center
2345 Grand Boulevard, Suite 100
Kansas City, Missouri 64108
(877) 275-3342
www.fdic.gov
National Banks and National Bank-Owned Mortgage Companies
Office of the Comptroller of the Currency
Customer Assistance Group
1301 McKinney Street
Suite 3450
Houston, TX 77010
(800) 613-6743
www.occ.treas.gov
Federally Insured Savings and Loan Institutions and Federally Chartered
Savings Banks
Office of Thrift Supervision
Consumer Programs
1700 G Street, N.W., 6th Floor
Washington, DC 20552
(800) 842-6929
www.ots.treas.gov
Federal Credit Unions
National Credit Union Administration
Office of Public and Congressional Affairs
1775 Duke Street
Alexandria, VA 22314
(703) 518-6330
www.ncua.gov
For state-chartered credit unions, contact your state's regulatory
agency.
Mortgage Companies and Other Lenders
Federal Trade Commission
Consumer Response Center
600 Pennsylvania Avenue, N.W.
Washington, DC 20580
(877) FTC-HELP (877-382-4357, toll free)
www.ftc.gov
Other Information Sources
U.S. Department of Justice
Civil Rights Division
950 Pennsylvania Ave., N.W.
Housing and Civil Enforcement Section, NWB
Washington, DC 20580
(202) 514-4713
www.usdoj.gov/crt/housing/index.html
Federal Housing Finance Board
1777 F Street, N.W.
Washington, DC 20006
(202) 408-2500
www.fhfb.gov
Department of Housing and Urban Development
451 7th Street, S.W.
Washington, DC 20410
800-669-9777 (voice)
800-927-9275 (TTY)
www.hud.gov
Office of Federal Housing Enterprise Oversight (OFHEO)
1700 G Street, N.W.
4th Floor
Washington, DC 20552
(202) 414-6922
www.ofheo.gov
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