Check out www.adamscapgroup.com for more Information on Personal Finance and Budgeting.

1. Making Wise Decisions on Home Equity Loans
Home Equity Loans and Home Equity Lines of Credit
One of the good things about owning a home or at least paying the mortgage on it is
that you build equity which you can borrow from when the need arises. These tools
for credit come in two types—home equity loans and home equity lines of credit.
Both allow you to fund certain projects like home repairs or improvements or even
pay for your child’s college tuition. In exchange, they also put your home on the line
so if you can’t pay, you risk losing that roof over your head.
There are fundamental differences between the two kinds of loans and choosing
which kind best fits your situation is part of the smart shopper’s guide to getting this
kind of loan. This report will give you the lowdown when you borrow against your
home’s equity so you can make the most out of it and not have face the scary
prospect of foreclosure in your future.
Home Equity Loan
A home equity loan, also called a second mortgage, is secured by your home. You can
borrow up to 85 percent of the equity you have put up in your home and receive a
fixed amount when your loan is approved. How much the lender is willing to grant
you will also depends on other factors. They will take into account your income,
credit history, and the market value of your home. Thus, it’s important that you get a
copy of your credit report and your credit score at least six months before you plan
on obtaining your loan. This way, you will be able to review it and check for errors
and enhance your credit rating. The better your credit score, the more competitive
interest rates you are most likely to get.
Just like your mortgage, you repay the home equity loan in equal monthly
installments at a set interest. If you don’t meet the monthly payments, the lender
could foreclose on your home. This is why it’s important that you already have a
solid and doable repayment plan in place before you even start looking for a lender.
Whether you need this loan to pay for tuition or a major surgery, consolidate debt,
or do home repairs or remodeling, you need to shop for the best deal around. Banks
are just one source of home equity loans. You can also get quotes from mortgage
companies and credit unions. If you know a trusted mortgage broker, you can ask
him for recommendations as well. Do not hesitate to inform lenders that you are

2. looking for the best rates and the most reasonable deal around. This way, you get to
haggle and be able to get the best terms.
When negotiating a home equity loan, take note of the interest rates and other fees
that might be added to your account. Remember, if you add to your loan amount
loan processing fees, origination fees, lending fees, appraisal fees, broker fees, and
others to your loan amount, you’ll surely end paying more for them over the life of
your loan. So negotiate these as much as possible.
Finally, don’t forget to look over your contract carefully. Read it and if there are
terms you don’t particularly like or was not reflected when you talked it over with
the lender, point it out and renegotiate. If the lender won’t agree to your changes,
don’t sign anything. There are always other lenders around who would be willing to
come to terms with you. Finally, if you do get to sign the papers and decide that you
want to cancel, you also have the right to do that under the three-day cancellation
rule. This states that you can cancel the deal for any reason without incurring any
penalty within three days from signing the loan contract.
Check out www.adamscapgroup.com for more Information on Personal
Finance and Budgeting.
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