Florida Brasil

Credit for Home Equity Line

Florida Brasil Search about student loans at FB
Mortgage Loan Center


Home Equity Line of Credit

Home Equity Credit Lines

Using a credit line to have a loan against the equity in your home is now a days a major basis of consumer credit. And lending companies are giving these home equity credit lines in a diversity of ways.

Most loans have different rates of interst, some loans come with appealing low rates, and a others come with rates that are fix. You can probably find loans have big one-time upfront fees, loans askinf for closing costs, and some have ongoing costs, such as annual fees. You can find loans with significant amount of payments at the end of the loan, and others with no amount but with more expensive monthly payments.

There is not a perfect loan for each homeowner. It is necessary to research about different home loan companies and try to find the best home equity credit line for you.

It is very important to review the home equity contract with a lot of attention before you sign. Make sure you uderstand clearly the terms and conditions of your equity loan.

Do you need a home equity credit line?

If you need money from a lender, home equity lines may be one useful source of credit. In the begining at least, they can provide you with significant amounts of money at reasonably low interest rates. And they may offer you with particular tax advantages not available with other different loans.

It is good to remind you that your home is used for the loan on home equity lines of credit . You can end up loosing your home if you can not afford your payments. The loans with significant amount of payment in he end, may force you to ask more money for lenders to payoff this debt, or they may put your home in jeopardy if your refinancing application for the loan is declined. When you sell your home, the money will be used to pay off your credit line. Also, because home equity loans give you basicly simple access to money, you might find you have a loan of money more liberally.

Don't forget, you can borrow cash from lenders using alternative ways. For instance, you decide to get second mortgage installment loans. Eventhough these loans add another mortgage on your home, second mortgage cash usually is loaned in a lump sum, rather than in a series of upfront made available by writing checks on an account. Also, second mortgages usually have interest rates that are fixed and also fixed payment amounts.

You can borrow money from credit lines that do not use your property in the transection. You can do that using credit cards or not secure credit lines writing checks everytime you need the money. You may want to ask about loans for specific items, like vehicles or tuition.

How much money can a home equity credit line lend to you?

It depends of the worth of your credit (your income, credit rating...) and the quantity of how much you owe, home equity lenders could lend you up to 85% of the appraised value of your home minus the amount you still owe on your first mortgage. Find out about the length of the home equity loan, whether there is a minimum withdrawal obligation when you open your account, and whether there are minimum or maximum withdrawal requirements after your account is opened. Ask how you gain access to your credit line -- with checks, credit cards, or both.

Also, find out if your home equity plan sets a fixed time -- a draw period -- when you can make withdrawals from your account. Once the draw period is expired, you may be able to renovate your credit line. If you can not, you will not be allowed to have a loan of additional funds. Also, in some plans, you may have to pay your full remaining balance. In others, you may be able to pay again the balance over a predetermined time.

What is the home equity loan interest rate?

Interest rates for loans fluctuate, so it pays to check with several lenders for the lowest rate. Evaluate the annual percentage rate (APR), which indicates the cost of credit on a yearly basis. Be conscious that the advertised APR for home equity credit lines is based on interest itself. For a real evaluation of credit costs, evaluate other charges, such as closing costs and points, which will include to the cost of your home equity loan. This is extremily important if you are comparing a home equity credit line with a traditional installment mortgage, where the APR includes the total credit costs for the loan.

As well, ask your lender about the type of interest rates offered for the home equity plan. Most home equity credit lines have adjustable interest rates. Adjustable rates may offer lower monthly payments in the begining, but payments may change and may be higher during the rest of the repayment period . If offered, fixed interest rates may be a little bit higher in the begining than adjustable rates, but fixed rates offer stable month by month payments over the life of the credit line.

If you are looking for adjustable rate (variable rate), research about the terms. Research about the limit on interest rate changes at one time (periodic cap).

Also, find out what is the limit on interest rate changes during the loan term (the lifetime cap). Ask the lender how often and how much the index they will be using can change. Lenders use an index to calculate how much to increase or decrease interest rates. Ask about how is the amount added to the index that determines the interest you are charged (margin), whether you can transform your adjustable rate loan to a fixed rate in the future.

Momentarily promotional interest rates are occasionally offered by Lenders. A rate that is normaly low and lasts for an preliminary period of time, such as twelve months. During this time, your monthly payments are lower too. After the introductory period ends, however, your rate (and payments) grow to the real market level (the index plus the margin).

So, ask if the rate that they are giving to you is "discounted," and if so, find out how they will determined the rate at the end of the discount period and how much larger your payments could be at that time.

What are the upfront closing costs?

When you take out a home equity line of credit, you pay for many of the same expenses as when you financed your primary mortgage. These involve things like an appraisal, application fee, attorneys' fees, title search, and points (a percentage of the amount you have a loan of). These expenses can put significantly to your loan's cost, especifically if you ultimately have a loan of little from your credit line. To see if they will pay for some of these expenses, you may want to discuss with lenders.

What are the continuing costs?

Additionally, some lenders require you to pay continuing fees during the life of the loan, to upfront closing costs. These may include a participation fee, or an annual membership, which is due whether or not you use the account, and/or a transaction fee, which each time you have a loan of money, it will be charged. The final cost of the loan will add these fees .

What are the repayment terms during the loan?

Your payments may change if your credit line has a variable interest rate as you pay off the loan, even if you do not have a loan of more money from your account. Ask how frequently and how much your payments can change. You probably will want to know whether you are paying back both principal and interest, or interest only. Even if you are paying back some principal, ask whether your monthly payments will cover the full amount that they lended to you or whether you will owe an more payment of principal when the the loan is over. Also, ask about late payments penalties.

What are the end of the loan repayment terms?

When you take out the loan, ask about the conditions for renewal of the plan or for refinancing the balance that is not paid yet. Ask the lender to agree in advance and in writing to refinance any end-of-loan balance or extend the time of your repayment.

What safeguards are built into the loan?

The Federal Truth in Lending Act is one of the best protections you have, which tell lenders to notice you about the costs and terms of the plan when you are given an application. Lenders must disclose the APR and payment terms and must report to you of charges to open or use the account, such as a credit report, an appraisal or the fees for an attorney. Lenders also have to report to you about any variable-rate feature and give you a brochure that descrobes the general features of home equity plans.

If you decide not to enter into the plan because of a change in terms, all fees you paid earlier must be returned to you. The Truth in Lending Act protects you from changes in the terms of the account (other than a variable-rate feature) before the plan is started.

you have three days to cancel the transaction for any reason, because you put your home in risk when you open a home equity credit account.
You must inform the lender in writing to cancel. Following that, your credit line must be cancelled and all fees you have paid must be returned.

The lender may not terminate your plan, speed up payment of your remaining balance, or change the terms of your account once your home equity plan is opened, if you pay as agreed.

The lender may stop credit advances on your account throughout any period in which interest rates go above the top rate cap in your agreement, if your contract permits this action.


Florida Mortgage Resources

What is a Reverse Mortgage
Reverse Mortgages in FL
Understanding Mortgage Terms
How much mortgage you can afford
Mortgage Loan
Home Equity Line of Credit
Florida Mortgage Lead
Mortgage Calculator
Florida Mortgage Broker

What is Foreclosure?
Foreclosures in Florida

See also:

Student Loan Consolidation Program
Federal Trade Commission Website

Home Insurance Company

Compare Homeowners Insurance Rates

Miami Home Insurance

Orlando Home Owners Insurance

Tampa Homeowners Insurance Quote

Add Daytona Beach to My Favorites

Florida Cities Mortgage

Boca Raton Mortgage Loan
Mortgage Broward County
Clearwater FL Mortgage

Daytona Beach FL Mortgage
Destin FLA Mortgage Lender
Fort Lauderdale Mortgage
Fort Myers FL Mortgage
Miami Mortgage Company
Naples Mortgage Companies
Orlando Mortgage Company
Panama City FL Mortgage
Pensacola Mortgage Loan
Sarasota Mortgage Loan
West Palm Beach Mortgage Company



Privacy Policy
- Terms of Service - Site Map - Florida Guide

Copyright © 2003 by Florida Brasil.com
All rights reserved