Home equity loans are still relevant I am going to show why they still are in this article. Before I dive in I would like to introduce you to what a home equity loan is and what it is not.
In this post:
What is Home Equity Loans?
Home equity loans refer to the loan which is granted on the basis of the equity involved in the home, i.e. taking a loan using the residential asset of the individual as collateral. Home equity loans are the highest demanded loan, because of their various salient features, which make them more and more accessible and affordable.
This type of loan is available to any individual who owns a house, which is the only criterion to be fulfilled to have this loan. This loan has been so much appreciated because it is easily accessible with not many formalities involved and also that the repayment procedure is really easy. These loans are available for different purposes like debt consolidation, education, renovation of the house, and other things as well.
ALSO READ: Benefits of Taking a Home Equity Loan.
Home Equity Loans Rate
The repayment of the loan is made really easy, where the debtor needs to repay the principal along with the meager amounts of interest. The debtor is at a benefit when he is taking up a home equity loan since the loan amount is decided at the face value of the house and also at times it is extended up to 125% of the face value of the house. The debtor, after having the limit of credit, can withdraw money from the loan amount according to his needs and is needed to pay the interest on the amount he has withdrawn and not the amount that has been fixed as his credit limit. These easy payment schemes along with easy interest payments have made this kind of loan the most popular among the masses, who prefer taking loans through home equity loans.
The best way of leveraging the pecuniary value that is invested in the house is by going for home equity loans. Many imperative purposes are solved by utilizing the money involved in the house, which is left not for much productive utilization. By taking up a loan through home equity loans, the amount invested in the house, which has not much liquidity is put to good use without any hassles, since it involves easy repayment and low-interest rates.
TRENDING: Best Ways to Leverage Income Opportunities.
Home Equity Loans Interest Rates
Also, the interest of these loans is tax-deductible and does not involve bringing in many tax hassles. The loan is very friendly which keeps the debtor away from many problems that are faced by the individuals taking loans through the traditional ways of taking loans. The best part of this is, any individual of any background, having the worst of credit records can also manage to procure a loan through a home equity loan, provided he owns a house of his own and that house has got some value, on which the creditor reckons the limit of credit for the debtor. This loan involves a revolving line of credit which is very beneficial for the debtor taking up the loan.
Home Equity Loans Requirements
The basic requirement to qualify for a home equity loan is that you should own a house and that’s it. Aside from this, the requirements vary from one lending company to the other. For instance, some institutions require that you need to have enough equity in your home and should have already paid down at least 15% to 20% of your home’s value in other to qualify for this type of loan — so, for example, $200,000 if your home is valued at $1,000,000.
Some lenders also say that in order to get your home equity loans application approved, you will need to maintain a credit score of 620 or higher and a Debt-to-income ratio of 43% or lower. In order to confirm your home’s fair market value, your lender may also require an appraisal to determine how much you’re eligible to borrow.
READ ALSO: All You Need to Know About Mortgage Loans.
Top 10 Banks That Offer The Best Home Equity Loans
Below are 7 banks that will offer you the best Home Equity Loans. Just locate a branch near you and file your application.
- Bank of America (BOA)
- Wells Fargo
- Navy Federal Credit Union
- Discover Financial Services
- Regions Bank
- Pentagon Federal Credit Union (PENFED)
- Flagstar Bank
- Truist Financial
- US Bank
- Connexus
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