Consumers Guide to Home Equity Installment Loans

19Looking for a way to fund new home renovations, invest in a second property, or pay for a child’s college education? A home equity installment loan might fit the bill. Consumers often turn to home equity loans as a way to finance a large expense or investment using the money they have already invested in their home, without refinancing their mortgage.

What is a Home Equity Installment Loan?
A home equity installment loan is a loan that uses the equity you already have in your home as collateral. With your home’s equity as a guarantee, lenders are willing to offer larger loans at lower interest rates than many other types of loans.

Unlike a home equity line of credit, most home equity installment loans are standard, one-time loans that are approved for a given amount and must be repaid over a pre-arranged schedule of installments ranging from three to 30 years, similar to a primary mortgage or car loan. Installment payment amounts include both principal and interest.

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Get Help Understanding What a Reverse Mortgage Is

18As you age, you may be trying to figure out how you are going to pay all the unexpected bills that may accrue. For those who own their home, a reverse mortgage is an option. This guide will help you understand what this type of loan is, how it works, and the steps you need to take to procure one of your own.

What Is a Reverse Mortgage?

This loan is not new. Previously called Home Equity Conversion or HECM, it allows you to access the equity that your home has without requiring the monthly payments of a traditional line of credit. The Federal Housing Authority (FHA) and the Department of Housing and Urban Development (HUD) back these contracts. The proceeds from this disbursement are tax-free.

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Loan Consolidation – How to Get Your Debt Reduced Through Consolidation

17Todays economy is a referendum on the “haves” versus the “have-nots.” Either you are a homeowner with some borrowing power, or you are a homeowner struggling with your largest investment. Either you have equity in your home, or you do not have equity in your home. If you have equity in your home there are still good options for you to access money and pay off debt. If you do not have a home or equity in that home then your options may be somewhat limited.

If you are one of the lucky few who bought a home prior to the housing boom in 2002 you might be in luck. Particularly if you put down a significant amount of money, roughly 20%, for a down payment, and upgraded the amenities in your home through renovations. Also, if you purchased the home in the right location then you may have a really significant amount of equity in your home. That equity can come in handy when it is time to pay off debt.

The equity in your home has what is known as tangible value. And, in difficult times like these in which access to money is scarce; that equity can be potentially very valuable because it can be accessed as collateral for a home equity refinance. Typically a home equity refinance will come in the form of a Cash-Out Refinance or a Home Equity Loan.

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Options of Home Loan Refinancing

16If you are looking to save money on your mortgage, then refinancing is probably an option that you have considered. Before you take the plunge, you need to research your options to choose the right one for your needs.

You will notice that you have two major options when it comes to restructuring your loan. The first is the cash-out choice. The second is the rate-and-term option. Of course, there are other reasons to refinance the terms of your mortgage. You could want to get out of an adjustable-rate agreement or eliminate FHA insurance.

Cash-Out Refinancing

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Home Equity Myth

15If you are like most people your home will be the single biggest investment you make in your lifetime.

Many people have been led to believe that their home equity is their largest asset, which may or may not be true, depending on a number of circumstances.

Your home equity is the value of your ownership position in your home. You can quantify your home equity by subtracting any outstanding mortgages from the market value of your property. The difference is the value of your stake in your home, your home equity.

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