What kinds of improvement the homeowners want to find when they renovate their home? Should the homeowners use the home improvement loans for repairing jobs?
The post 9/11-terror attack on the United States has made the investors skeptical of investing their hard earned money in the stock market. Thus it is not a feasible option to invest in the stock markets any more. You now need to try out the private mortgage loans to make sure that your money is safely invested. Mortgages would be more useful than stocks or mutual funds.
In essence, there are two different types of home equity loans which are term or closed end loans, and lines of credit. Both can be referred as second mortgages and are secured by your property. In essence, a closed end line and a line of credit are just like your traditional mortgage and allow the lending institution to put a lien on your property. However, lines of credit and home equity loans are normally shorter than first mortgages. For instance, most mortgages run for 30 years or more however equity loans are typically for 15 years or less.
Many financial experts compare a home equity line of credit to a credit card. Instead of giving you a lump sum, a lender lets you know how much you can borrow, and then gives you a way of accessing cash when you need it. Don’t be fooled, however. This is still a loan. You can usually choose between a fixed interest rate and a variable interest rate. You make payments on the loan as you go along, and as you access more of your line, the payments can increase. A home equity line of credit is ideal for those wishing to access their homes’ equity in order to do home improvements. It allows you the freedom to get the money you need for improvements as you need it, but without borrowing extra.
Next week the fed will auction billions in long term bonds. It’s effect on mortgage rates will depend on demand. High demand will lower rates and vice versa. The Dollar Index made it’s biggest gain in 2 months in the past 2 days which should be good for investor confidence in long term bonds.
Both of these types of real estate based loans can help a consumer consolidate their debt or pay for big ticket items. It is important to realize that both of these types of loans are using a person’s house as collateral. This means that if a borrower cannot make payments, the bank can foreclose on their house.
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