Someone explain to me what exaclty is a home equity loan. I've researched on the web. I found you can actually get into trouble with home equity loans. Your actually using your house as colateral???
2007-01-10 01:45:50 · 10 answers · asked by Anonymous in Business & Finance ➔ Personal Finance
It is the same as getting a second mortgage, and yes, you are using your house as colateral, so if you don't need the extra money, don't do it.
It is like getting a charge card with a very high limit,,,, but you have to pay it back.
2007-01-10 01:49:30 · answer #1 · answered by Anonymous · 1⤊ 0⤋
An equity loan/line is the difference between the value of your home and what you owe on it:
mortgage: $150k
value: $225k
equity:= $75k
Yes, your home is the collateral, just as it is in your mortgage that you have. You can get into trouble if you are unable to make both payments on your home. Make sure that the loan (if you decide to get it) makes sense for you.
Sounds like they are just trying to get a loan out of you just b/c you have a house through cold calling & mailers. If you are not seeking a loan or need one, you can throw away the letters & tell them they dont need to call you anymore.
2007-01-10 02:21:08 · answer #2 · answered by ricks 5 · 0⤊ 0⤋
Being a homeowner gives you a lot of financial power with your bank.
Your house can be used as collateral to get loans and lines of credit (these are considered home equity loans/lines of credit because you are borrowing against the equity in your home).
People get in trouble with these when they can't afford the mortgage (and everything that goes with it) as well as the additional loan amount.
2007-01-10 03:32:47 · answer #3 · answered by Anonymous · 0⤊ 0⤋
I'm not in the Real Estate/Banking world but I do own a house and rea ding your situation I do feel that you will get approved for a 2nd mortgage. Your debt to income is low according to the information that you gave so this should show some creditablity on your behalf and get your approved. With the low credit score - the interest rate may be a little higher. Best of luck
2016-05-23 03:48:26 · answer #4 · answered by Anonymous · 0⤊ 0⤋
equity is the difference between what your owe on your house and the actual value of your house. yes they use your home for the collateral for the loan. if you do not need the money do not get the loan.
2007-01-10 01:50:48 · answer #5 · answered by starla 3 · 0⤊ 0⤋
YEP!!!!!!!!!! Home equity is the differance of what your house is worth and how much you owe!! Get in touch with real estate atty or your local bank should be willing to explain it all to you!! Try not to use your equity to consolodate bills, use to do home improvments, which will add value to your home when ready to sell!!
2007-01-10 01:51:56 · answer #6 · answered by mamaexfour 4 · 0⤊ 0⤋
there good to have for an emergency, but to use equity from your home to buy a car (solid expense) isn't worth it at all!! I would stay away from it if you could... especially at our age
2007-01-10 01:50:19 · answer #7 · answered by Anonymous · 0⤊ 0⤋
You will get those in the mail FOREVER! They are non-stop. Probably they are all legitimate offers. If you need money, go back to the bank where your mortgage is from.
2007-01-10 02:59:54 · answer #8 · answered by Speedoguy 3 · 1⤊ 0⤋
If you are doing well paying your mortgage don't bother with another loan.
2007-01-10 01:54:09 · answer #9 · answered by Maria b 6 · 0⤊ 0⤋
I suggest taking out a couple of those loans and go really, really deep into debt - then get married, have a couple of kids, then split with your wife's sister.
2007-01-10 01:58:41 · answer #10 · answered by Anonymous · 1⤊ 3⤋