Suppose you have obtained a first mortgage worth ₤150,000 on your property. You have paid ₤70,000 in last 5 years. Your home value has also increased to ₤300,000 in these 5 years. So your home equity is ₤1, 50,000 (₤300,000 – ₤70,000). Now if you take a home loan worth ₤2, 30,000 keeping the home equity as security for the debt, then such loans are called home equity loans.
Equity is the difference between how much the home is worth and how much you owe on the mortgage if you have more than one on the property. Home equity loans are second mortgages that let you turn equity into cash, allowing you to spend it on home renovation and improvements, business extension, availing children higher education, debt consolidation, or other expenses.
There are many benefits of home equity loans. Followings are some:
oLow interest rate home equity loan
oBorrow up to 125% of your home value (amount ranges ₤3, 000-₤75, 000)
oFlexible repayment term (term of 5to 25 years)
oMake any use of the loan amount
oFree online advice for home equity loans
oLower interest rates
Home equity loans are quite useful, and have several advantages over other types of loans, such as credit card loans or more traditional secured loans. The biggest advantage is that the interest on home equity loans is tax deductible. The interest rates on home equity loans are already pretty competitive, but the addition of the tax deduction makes them pretty hard to beat.
Home equity loan is risk less loans. The lenders use the borrower’s home as collateral security. Home equity loans allow users to access funds depending upon the borrower’s requirements in varying amounts up to their credit limit.
For this cause, there are innumerable lenders present online. With the respective terms and conditions, these lenders are going in for alluring borrowers one way other. Availability of home equity loans online has made availing rather time-saving and instant at processing.