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[S1150]Suntrust Home Equity Loan

by Petra Amelia, Pet

1. The advantage with a home equity loan is the ability to use the loan amount any way you want, such as funding emergency, paying off debt, college, a vacation, or home renovation.

2. Interest rates for a home equity loan tend to be lower than credit card rates or consumer loans. Another advantage associated with home equity loan interest rates is that it is tax deductible up to the equity value in your home or up to $100,000 - whichever is less. (note - the tax-deductible portion is based on a percentage)

3. Home equity loans are also quite flexible, in the sense that it allows you to choose when to use the money, and you may be able to decide when to repay the principal.

The Cons of Home Equity Loans

1. You may risk losing your home with a home equity loan if you can't repay or refinance the loan, since your home is the collateral for the home equity loan, similar to an additional mortgage on your home. Foreclosure can happen within 60 to 90 days of late/missed payments.

2. For people experiencing career changes, home equity loan can also been an advantage, putting your home at risk. If the value of your home falls, it is probable that you might be left with more debt on your property than it's worth.

3. Home equity loan interest rate is dependent on the change in economy, causing your monthly payments to rise or fall. So, it's important to know the cap on the home equity loan's interest rate, which determines how high your interest rate can increase each year, or over the whole loan time period.

4. Home equity loan lenders can charge several types of fees such as application, origination, and withdrawal fees.

Things to remember when getting Home Equity loans:

1. Home equity loans are ideal for people who want to borrow a lump sum amount and reap long-term rewards.

2. Home equity lines of credit, on the other hand, are more suitable for those focusing on the short-term.

3. When considering home equity loans as means to consolidate debt, pan on the long-term effects.

4. Consider your financial situation before applying for any type of home equity loan, and weigh down all the pros and cons.

5. Compare interest rates, fees, repayment conditions, loan amount, and additional costs between several lenders.

6. Read all the fine print

7. Do not accept offer for a credit card to access your credit line, which makes using your loan too easy.

8. Set up a systematic repayment schedule, and remember that it's best to pay more than the minimum required.

What is the most secured and most comfortable place in this world? If you ask this question to yourself, there is only one perfect answer that will come to your mind for sure. And that answer is your own home. But your home is not only confined to security and comfort only. It has very much to do with your finances also. Your home can get you funds through a secured home equity loans.

Secured home equity loans offer two ways to get money - home equity loan and home equity line of credit. Home equity loans gives you the whole loan in a lump sum amount and you have to repay them in form of installments at a fixed rate. Home equity line of credit or HELOC is an interesting concept where you can use the loan as if you are using a credit card where you pay interest on only the amount you borrow. There is also a limit set up to which you can borrow under HELOC.

The concept of secured home equity loans is based on the equity in your home. The more the equity, the more you can apply for. Equity reflects the present market value of your house less any debt taken against it. The loan is secured by the home itself and allows you to borrow up to 125% of the property. Secured home loans carry a low rate of interest as compared to credit cards and other loans. The amount you pay as interest is tax deductible.

Borrowers are required to consider certain practices followed by lenders to charge more from borrowers:

- Equity Stripping: The lender encourages you to "pad" your income on your application form to help get the loan approved even when you don't have enough income to repay. The result is loss of your asset when installment is left unpaid. So never apply for a amount which you can't repay.

- Hidden loan terms: Lenders can charge you with hidden cost afterwards so it is always recommended to read out terms and conditions before signing any such documents.

- Frauds: There are several fraud lenders in the market called as loan sharks that attracts you with flashing offers and may cost your home at the end through misuse of your details and documents. Always enquire about the genuineness of the lender by studying his past history in loan market.

Secured home equity loans offer you money to use it according to your necessity. You can use it for business, education, health, wedding or debt consolidation which makes them most widely used method of financing.

Article Source : Pg. 328

About Author

Both Petra Amelia & James Taylor 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.

Petra Amelia has sinced written about articles on various topics from Bad Credit Home, Finances. Apply for and read reviews on the top lenders plus find more articles on. Petra Amelia's top article generates over 40500 views. to your Favourites.

James Taylor has sinced written about articles on various topics from Personal Finance, Finances and Bad Credit Loans. James Taylor holds a Master's degree in Commerce from JNU. he is working as financial consultant for Chance For Loans.To find a