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Your Family's Increasing Needs Call For A Fixed Home Equity Loan

Your Family's Increasing Needs Call For A Fixed Home Equity Loan


    

Your Family's Increasing Needs Call For A Fixed Home Equity Loan

by Eddie Lamb

If you have been putting off a redecorating or home development job, waiting for the right time, this may be your chance. You may want to consider getting a fixed home equity loan to tackle all of your projects and take advantage of the low rates that are currently available on the market.

If you haven't noticed the economy has been kind of slow, but this case it can work in your favor if you are looking for just about any type of service. If you want workers to fix up your home, well, once very busy construction workers and carpenters are not so busy any more and want your business. What this means for you is better prices for the services you need. This is where a fixed home equity loan may be a practical step for you to take.

This type of loan, which is also known as a second mortgage, works as using a lien against your home. This allows the lender to safeguard their money and that is why this kind of loan is considered a safe debt. If you default on your payments and are unable to keep your repayment obligations the lender has the option of putting the house up for sale.

If you decided to negate on your payment promises the lender can use your home as debt collateral and put it up for sale. This is their right since you signed onto their terms with a fixed home equity loan.

You would think that putting your home as collateral for the loan would be enough for approval but it is not. You must have an excellent credit reading in order for your loan to be approved. Loan amount must be in balance with your mortgage amount and home value as well.

A home equity loan regularly comes with a fixed rate so you do not have to worry about fluctuating rates affecting your monthly fee. A home equity line of credit on the other hand does not. The rates with a line of credit vary which will effect your month to month payment based upon varying factors. That is why when considering a large loan in order to make payment on a major home repair, or medical fees, university costs or whatever the reason you want to have a fixed rate on your home equity loan in order to avoid any surprises down the road.

Your home equity loan can get you a tax rebate because these loans are usually taken to perform basic functions, but before filing it would be wise to get the advice of your accountant. Although we may wish it to be true, tax deductibles do not all inclusive cases but it will depend on your individual status.

Staying with the tax deductible theme, the interest rate that accrues on the loan is typically tax deductible and you can get a tax rebate in this case. In addition to this, you should make sure you are aware of how the rates on a loan will add to your monthly fee.

Do your homework on different lenders so that you can secure yourself the best rate. When you compare the rates between brokers you will have a better idea of what to expect. This way you will come out of this process with the best rate available for you.

About the Author:
If you have been putting off a redecorating or home improvement task, waiting for the right opportunity, this may be your chance. You may want to consider getting a fixed home equity loan with our home equity loan comparison.


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