The home equity loan puzzle
Home loan plans require flexibility and time apart from some money on good interest rates. So while you borrow money through home secured loan route, do ensure that these two attributes are build into your loan structure.
You can also take an equity loan for the purpose of your home improvement loans. How does such an equity loan work?
A home equity loan or what is more popularly known as the second mortgage loan is a lending that gets secured by the equity in your home. The equity is defined as the net difference between your proposed borrowing and the market valuation of your property as per the lender norms.
There are two variants of the home equity loan. The first one is the simple home equity loan. It is also referred to as the close ended loan. Here you get a loan in a lump sum amount the repayment of which is spread over a fixed period of time with a fixed equated monthly installment.
The second line is known as the equity line of credit. The sanctioned amount is made available to your use as and when you need it. The interest rates are variable and are charged only for the amount which you have withdrawn or are being used by you. The entire sanctioned loan amount is not charged the interest. The borrower saves a lot of cash by way of interest savings.
This line of credit is more suited for your home improvement loans whereas the former line of credit (simple equity loan) is better suited for purchase of property/home.
“The second line is known as the equity line of credit. The sanctioned amount is made available to your use as and when you need it.”
A Home Equity Line of Credit (HELOC) can be used to power an incredible financial tool that will allow you to accelerate home equity and thereby eliminate the biggest obstacle you have in wealth creation (your mortgage):
Today’s Real Estate market means that folks can no longer count on appreciation to build home equity. Those who realize that they need to pay down their current mortgage debt are looking for alternate ways to aggressively (yet safely) build equity.
And they’ve discovered a perfect online system to do that; they can focus on their wealth accumulation goals while accelerating their equity simply by using a Home Equity Line of Credit (HELOC) to ‘power’ the Money Merge Account™ financial solutions program.
A typical 30 year loan (of whatever type) can be paid down in 1/3 to 1/2 the time — it’s a great way to save *huge* amounts of income by eliminating a mortgage amortization front-end interest load. (On a million-plus dollar home, I’ve personally seen where the Money Merge Account™ program will save the homeowner $750,000 in interest charges!)
And the best thing – homeowners don’t have to refinance their existing mortgage or, in most cases, make adjustments to their lifestyle.
I’d be happy to provide further details…