How much equity do I have? You have equity if your home is worth more than you owe on it. For example, if your home is worth $250,000 and you owe $150,000 on it, you have $100,000 in home equity.
What is the loan process? To qualify, you must have equity in your home. Here's what happens after you contact a lender:
The lender will send an appraiser to determine your home's value. The lender will determine the maximum loan amount based on the equity in your home. You will sign a contract and a Deed of Trust will be recorded against your home. This means that if you don't make the payments, your home can be sold.
What are the costs? When you apply for a home equity line of credit, you pay many of the same fees you did with your original home mortgage. These fees can be very costly, especially if you end up borrowing little from your home equity line of credit. Loan charges vary from lender to lender and include fees for:
Appraisal Recording Title Report
Messenger Services Credit Report Document Notary
Document Preparation Annual Charges
Interest rates
Most home equity credit lines have variable interest rates. Variable rates may offer lower monthly payments at first, but the payments do change and can be much higher.
Fixed interest rates require higher payments at the beginning than variable rates, but offer stable monthly payments over the life of the loan.
Things to consider
Your home will be used as collateral and a Deed of Trust will be recorded. This means that if you don't pay back your loan, the lender can sell your home.
If you want the home equity credit line removed from your property title, you must first pay back the money you borrowed. The lender must then record a full reconveyance.
Payments on the equity line of credit will vary depending on the amount you use. The more you use, the higher your monthly payment.
If you sell your home, you must repay the credit line amount you have used.
There may be tax advantages when using a home equity line of credit. Check with your tax advisor for more information.
Other loan options
You can borrow money without using your home as collateral. Credit cards, unsecured loans and loans for a car or school tuition are also available. These loans do not put your home at risk if you are unable to make the payments.
3 Day right to cancel
You have three days to cancel the transaction for any reason. You must cancel in writing. However, the loan fees and charges will not be refunded.
How do I find a lender?
Banks, mortgage companies and credit unions are the most common lenders. Here are some tips for finding a lender:
Contact three or more lenders. Look for a loan with the lowest interest rate, points and fees.
Be sure the lender is licensed and in good standing.
Today credit cards are in use by the young and old. Credit cards are a convenience when used correctly and have over time become a representation of a person's credit worthiness. There are a great many advantages as well as disadvantages to using a credit card. The card is useful if you are careful not to fall into debt by spending more that you can afford. If you are unable to clear the bill accrued on the card each month then the interest payments alone will be phenomenal. A card can help you travel and shop without carrying rolls of cash and is useful in times of emergencies like hospitalization.
A credit card is offered by banks and financial institutions only after checking the credit worthiness of the applicant. To be eligible for a credit card one needs a great credit report and score. Before issuing a card the bank or institution will take into account: the number of credit cards owned by the applicant and the amounts due on each; the loans availed; payment defaults; late payments; ownership of house and car; whether there has been a judgment for unpaid debts or a filing for bankruptcy; the monthly income and sources; and financial burdens.
Credit cards come with many advantages. Many offer discounts on travel, gas, and shopping. Others carry a bouquet of offers like cash back, reward points, and flying miles. A credit card properly managed means easy sanction of loans, lower interest rates on mortgages, car loans, and personal loans.
The market is flooded with credit cards of all kinds so it is important to learn about each and choose what will benefit you the most. Never accept the first offer made by a credit card company and always read the fine print. Most credit card companies are market savvy and make attractive promises to consumers.
To be eligible for a credit card you need to get a credit score and report ready. Sit down and study the two and find out whether you need to improve them. Read as much as you can about the world of credit cards and the pros and cons of owning one. Find out which kind of card will be most suitable. When in doubt ask your bank manager for advice. Factors you must consider are: annual percentage rate, fees, grace period, transaction fees and other charges, special offers, and customer service.
In order to apply for a card you need to be over 18 years old, have a regular income, and have on hand all the documents required including a credit report. If you do not have accredit report you should obtain one form a reputed agency like Equifax, Experian, or Trans Union.
Before applying for a credit card, you must weigh all the pros and cons so that you do not take on more than you bargained for. And use a credit card wisely. Never spend more than you earn. Budget your finances and a credit card will work well for you.
Both Lar & Arron Brooks are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.