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JEAN
Equity is would be profit if you sold the home.
An home equity loan is borrowing against what they think you would make if you sold your home, these are relay bad traps and is hurting a lot of people.
There are two way of getting equity, one what have you paid off on the home loan, let say after a few years.
The other is if they say you value of your home increased lets say by 10k then they will give you a 10k loan.
The trouble hear is if they could not afford a home for the price pulse10k why can they afford it not.
Since you are getting educated about home buying check out this web site it tell how the housing bubble was made.
LEMUEL
A Home Equity Line of Credit is like a credit card. You can borrow money up to your credit limit, and you only get charged interest on the portion that you borrow. You can pay down the balance, then reuse the credit. Most have a draw term, usually 5 to 10 years, where you can draw money out, then the loan is paid back over a 10 to 15 year period. You may also elect to refinance the Equity Line and get another 5 to 10 years to use the line of credit.
You choose what you want to do with your home equity line of credit:
Remodel your home
Take a vacation
Consolidate bills
Buy a car, boat or RV
Finance tuition or other expense
Use it as an emergency fund
There are many features of HELOC loan programs. Ask your Loan Officer to help you decide which is best for you.
Great Rates: rates can be below the prime rate on some programs.
No Loan Fees: No appraisal fee or closing costs.
Convenient Closings: Some programs allow doc signing in your home.
Credit lines or maximum loan limits vary with each program.
Pricing varies with the LTV.
Accessing the cash in your credit line can be done by writing a check, charging on a credit card or making a withdrawal at a financial center.
Many of these programs have an early termination fee.
Some programs may offer a fixed rate loan option feature, where you can lock in a fixed rate on all or a portion of your outstanding balance.
Pricing is based on your Credit Score. These cutoff limits are fairly strict, so if your score is just below the next higher range, you may want to discuss how to improve your score with your loan officer.
GARRY
Home equity loan is that you can borrow money and put your house collateral. Basically if you don’t pay than kiss good buy to the house. The difference between load and equity line, that equity line is more flexible than traditional loan. Some time to lower the payments you can only pay interest on the equity line and when money in future than pay off the loan.
Equity means how much money you have paid towards the principal. for example, you bought the house worth 200,000 and put 50,000 down. During first year you paid total 12,000 ( 1000 a month ) in installment. Out of that assume 9000 was interest and 3000 was principle. Than your equity is 53,000 (50,000 + 3,000)
Mainly the different types of loan are, fixed loan (interest rates stays fixed during all the years ), flexible ( interest rates changes after certain years).
There is a lot into this, it can be very tricky. You need to understand the concept of the present value, future value, compound interest to understand more how it works.
FREDDY
The term “equity” refers to the difference between the loan balance on your home and the value of your home. For example, if the value of your home is $100,000, and the balance of the loan on your home is $80,000, then your equity is $20,000.
Another common term you’ll see is Loan-to-Value (LTV), and in the above scenario the LTV is 80%.
A “home equity loan” is simply a loan which uses the equity in your home.
Regarding the types of “mortgages”, there are too many to list here. The two most basic ones are the fixed rate mortgage and an adjustable rate mortgage, an within these two categories there are many variations.
Here are a couple of excellent websites for your education:
ROMAN
home equity loan details,
EVERETT
Buying your first home is NOT difficult. Try not to listen to someone who tells you that it is.
Browsing through this website will help you get started:
information about mortgages: