Home Equity Loans



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Wednesday, May 31, 2006

Guide to a Home Equity Loan

Guide to a Home Equity Loan
By: John Mussi

Considering renovating your home or need money for an
investment? Home equity loan are a great way to borrow large
sums of money that you may not otherwise qualify for through
other loan options. The reason for this is simple - your house
is the collateral against the loan.

Looking at this from the viewpoint of the lender, they consider
a home equity loan a safe loan. They believe you are more likely
to not miss payments since the ownership of your house is on the
line. If you were to default on the loan the lender has a
valuable asset, your home, to offset their loss.

What to consider when choosing a lender

Thoroughly research each lender you are considering for a home equity loan. Talk to your friends and colleagues about their
recommendations or what information they may have on the lenders
you are considering. Take nothing at face value rather make sure
that you get everything in writing.

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It is important to have a budget before you begin your research
into a lender. Be reasonable in what you can afford in a home
equity loan. You do not want to end up with a loan where the
monthly payments are crippling your cash flow. After careful
planning and review of your budget, consider purchasing
insurance for your home equity loan. This is a great option to
consider; in the event of unforeseen circumstances that prevent
you from making your monthly payments. A form of backup, whether
that is through the purchase of other assets or insurance, is
always a wise course of action. Discuss with your lender the
option of paying your insurance premiums monthly along with your
loan payments.

Ways you can use your home equity loan

House valuations have increased considerably over the past ten
years and homeowners are often unaware that they can use a home
equity loan as a way of raising finance for home improvements,
debt consolidation, purchasing a new car, or a well-earned
holiday. You can use a home equity loan for anything you would
like.

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In addition, the use of a home equity loan can be a great source
to add value to your home through home improvements or invest in
another type of asset. Remember though as with all your
financial decisions to not take a home equity loan lightly. You
face serious consequences in the event of a default.

In summary, home equity loans come with a diverse array of
options to meet most any budget specifications. There are
closed, fixed rate home equity loans and flexible lines of
credit with adjustable rates. As with all loans the rates and
fees vary according to the type of loan you choose. Review your
situation thoroughly and choose the perfect home equity loan for
your lifestyle.

About the author:
John Mussi is the founder of Direct Online Loans who help
homeowners find the best available loans via the http://www.directonlineloans.co.uk website.

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