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  1. 1. The difference between a home loan and a home equity loan lies mainly in that the home equity loan, also known as a second or even third mortgage, is issued at a higher interestrate. This interest rate is lower than you couldexpect to pay on a credit card, but it will be still higher than the original interest calculator UK
  2. 2. Use a home equity mortgage calculator to see what releasingdifferent percentages of your equity makes to the payments requiredThe mortgage calculator then allows you to compare whether this isthe best course of action open to you The alternative which may be
  3. 3. more attractive financially is refinancing your home completely Thisis where the mortgage calculator can really work for you There are anumber of options when refinancing, especially if you have asubstantial amount of equity in the home
  4. 4. By inputting these, one at a time, into a mortgage calculator you cancreate a list which will allow you to clearly see which option benefitsyou best Home equity loans often seem far more attractive to thehome owner than they actually are This is because the lender ishoping to seduce you into signing your property into his hands Findout all the details and use your mortgage calculator See if what youcalculates matches what they want you to sign for
  5. 5. Later you may find that it wasnt such a good idea as your homesuddenly becomes under threat of foreclosure because of somecontractual obligation that you hadnt fully understood Only inextreme circumstances should you even consider a home equityloan that completely strips your property of any value over mortgagetotal Keep your payments affordable by using the mortgagecalculator and always factor in an additional percent or two on theinterest rate Refinancing your home is a major step, but as with afirst mortgage this is the only claim on your property If you take out ahome equity loan instead, then you will have an additional lenderwho has a financial stake in your home
  6. 6. If you decide that you much prefer the terms on the home equityloan, and the mortgage calculator seems to bring it well within yourbudget, then make sure you read the small print carefully You needto know what the payments are for: are they just interest which willleave a large capital balance payable at a later date, for example?Make sure you can afford these additional monthly payments Hereare a few donts that will help you in the long run: * Dont lie toyourself or your mortgage calculator * Dont over-estimate yourincome under any circumstances; treat overtime money as "extra" ifpossible, and not part of your usual salary *Dont over-estimate theequity in your home in the mortgage calculator
  7. 7. This can lead to false hopes which your property appraiser willquickly dispel If you are hoping to use the mortgage calculator UKreleased capital to make home improvements, these should addvalue to your property Look into this carefully to find outapproximately how much youll be increasing your propertys valuebefore committing to either the loan or having the work carried outFailure to carry out the work means you are still responsible for theloan, but that you have not created any new equity
  8. 8. mortgage calculator UK