What Are Equity Loans?
For anybody who is on the market looking for a equity loan it would be worthwhile to do a little research before signing for any terms. Most lenders sell homes which have been offered as collateral for the outstanding amount if the borrower falls behind on his repayments.
Hence the first question one should consider is if you would be able able to afford the repayments associated with a new equity loan.
Most of the institutions providing mortgage loans offer between 25 to 30 year repayment terms. Depending on whether the borrower faithfully pays his monthly installment the amount will eventually come down.
When signing for the loan you also agree to repay the interest, hence you cover both the loan amount and the interest with your monthly repayment. However for the first few years the greater portion of the monthly installment will be applied towards the interest.
Only once the interest amount has been paid off will the full payment go towards paying off the loan amount itself, so it will take the full term of the loan to settle your account.
The mortgage lenders who'll allow you to repay only the interest are not many; however, these types of loans may result in you losing your home over time. This is because by the time you start repaying the capital or loan amount your financial situation may have changed so much that you may not be able to afford the repayments any longer.
The equity mortgages which are interest only, are normally characterised by having two agreements: The one agreement covers the interest payments while the other one relates to the payment of the loan amount.
The lender may even offer you an alternative repayment option, hence one must carefully consider
all the options before deciding to apply for an equity loan. By picking the wrong interest payment option, you may find yourself paying for years only to find that the loan amount has not even been touched.
There are many equity loans available; but, if you have been paying your current loan well and are therefore in good standing, then it may be worth re-evaluating equity loans as a means for re-mortgaging purposes.
By: Jimmy Roos
Article Directory: http://www.articledashboard.com
The author L Jimmy Roos writes widely, offering solutions on various topics that affect the human condition. For more information on equity and equity loans and how it can help you, please visit now www.equity-advisor.com
Hence the first question one should consider is if you would be able able to afford the repayments associated with a new equity loan.
Most of the institutions providing mortgage loans offer between 25 to 30 year repayment terms. Depending on whether the borrower faithfully pays his monthly installment the amount will eventually come down.
When signing for the loan you also agree to repay the interest, hence you cover both the loan amount and the interest with your monthly repayment. However for the first few years the greater portion of the monthly installment will be applied towards the interest.
Only once the interest amount has been paid off will the full payment go towards paying off the loan amount itself, so it will take the full term of the loan to settle your account.
The mortgage lenders who'll allow you to repay only the interest are not many; however, these types of loans may result in you losing your home over time. This is because by the time you start repaying the capital or loan amount your financial situation may have changed so much that you may not be able to afford the repayments any longer.
The equity mortgages which are interest only, are normally characterised by having two agreements: The one agreement covers the interest payments while the other one relates to the payment of the loan amount.
The lender may even offer you an alternative repayment option, hence one must carefully consider
all the options before deciding to apply for an equity loan. By picking the wrong interest payment option, you may find yourself paying for years only to find that the loan amount has not even been touched.
There are many equity loans available; but, if you have been paying your current loan well and are therefore in good standing, then it may be worth re-evaluating equity loans as a means for re-mortgaging purposes.
By: Jimmy Roos
Article Directory: http://www.articledashboard.com
The author L Jimmy Roos writes widely, offering solutions on various topics that affect the human condition. For more information on equity and equity loans and how it can help you, please visit now www.equity-advisor.com
posted by The Guru at
6:36 AM
