Home equity loans are term loans that are taken out against the value of your home already paid or the amount of the home owned. For example, homeowners who have paid 25% of their full outstanding loan balance, say $50,000 of a $200,000 mortgage, have that much equity in their home or how much of their home they actually own.
While understanding the basics is imperative for applying for a home equity loan, knowing when to apply for one is just as important.
Here’s a quick guide to the top three reasons most homeowners take out a home equity loan:
Home repairs
Home improvement projects can be taxing on both the homeowner and the homeowner’s budget. However, if the repair is one that will add value to your home, looking into a home equity loan may be a decent option.
This is usually a great way to reinvest your home equity back into your home, especially if you’ve already paid a significant portion of your mortgage’s outstanding balance.
Debt consolidation
For those attempting to defeat high-interest rates and consolidate their credit, utilizing your home’s equity could be another excellent way to manage your financial situation. Many who have adapted to this type of refinancing have found that taking out a low-interest, term-based loan like a home equity loan helped them regain their financial standing.
By using a home equity loan, they’ve managed to reduce their monthly payments in other financial areas and regained their monthly budgets.
Life expenses
Sometimes life happens. It can also happen in a way that’s more expensive than expected or just as costly as anticipated. Regardless of whether you’re paying for a ceremony, helping with a college tuition or simply need the extra money for an unexpected circumstance, a home equity loan can help you manage your expenses.
Just as with debt consolidation or home improvement, applying for a home equity loan during your more expensive life events can help you keep the payments manageable without over stressing you or your wallet.
Home equity loans are excellent ways to make your home and monthly mortgage payments work for you.
If you find yourself wanting to reinvest in your home or simply need an extra bit of assistance, reach out to a lender of your choosing and ask what options they have available for you. They have formulas and methods that can calculate home equity loan rates based on your specific needs and circumstances.
About the Author
Nancy Roberts
Nancy Roberts Realty was founded to provide integrity and innovation, honesty and good old-fashioned customer service. Our mission is to provide the most professional real estate services available in Western North Carolina (including Burke, Catawba and Caldwell Counties.) With our expertise and dedication, we will guide you through buying or selling.
Nancy Roberts Realty was founded on integrity, innovation and good old fashioned customer service. We treat you the way we like to be treated with honesty and respect.
We are relationship people, your not just a customer to us but a new friend. We are skilled at matching people with properties - we listen carefully to your needs to find you the perfect property.
Our mission is to provide the most professional real estate services available in Western North Carolina (including Alexander, Burke, Catawba and Caldwell Counties.)
With our expertise and dedication, we will guide you through each step of the buying or selling process, including choosing a lender, home inspector and moving company.
Let us help you find your property today!
