The equity you have in your home can be a powerful tool in managing your overall financial situation. Your equity, the value of your home minus your existing mortgage, can serve as collateral for additional borrowing.
Home Equity Loans
The amount you can borrow depends on the amount of equity in your home and your other credit characteristics. A general rule of thumb is that you may be able to borrow up to an amount so the total debt against your home (including the first mortgage and any other loans where your home is pledged as collateral) is less than 75% or 80% of the current value of your home.
The interest rate
charged will usually be variable and will be tied to some published index,
like the prime rate. Be sure to check out the rate details. Usually,
you repay the loan in regular installments and with minimum repayments
required. With some home equity loans, the minimum payments may only be
the interest on the loan and you may be required to repay the loan at
a certain date.
Beware of the risks
Read and understand all the details before signing. Loan documents can be confusing and the easy process of getting this type of loan can mask the costs and risks.
Take Control of Your Financial Future
Articles from our library about buying and owning a home.
Learn more about how Forest Bluff Financial Services can help you reach your retirement goals.
Learn more about reaching all your financial goals.
Financial Foundation Center (for young adults)
Financial Tool Kit (for those working toward financial goals)
Kit de Herramientas Financieras (Spanish version of Financial Tool Kit)
Forest Bluff Financial Services is your partner for a secure financial future.
Return to our website.
© 2007 Financial Wisdom Marketing Services, Inc.
Legal Notices and Privacy Statement