Foreclosure
12 September 2007
Foreclosure doesn't just happen to people who don't make their mortgage payments. Your homeowner's association (HOA) can take your house or condo if you're not careful. In one case, a disabled California man lost his home in a foreclosure sale because he was $123 behind on his homeowner's dues. The house was worth $280,000. Unfair? Abusive? You bet!
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12 September 2007
Foreclosure doesn't just happen to people who don't make their mortgage payments. Your homeowner's association (HOA) can take your house or condo if you're not careful. In one case, a disabled California man lost his home in a foreclosure sale because he was $123 behind on his homeowner's dues. The house was worth $280,000. Unfair? Abusive? You bet!Read More »
What is a Home Equity Line of Credit?
By Sarah ClarkNFNS Columnist
Home equity lines of credit have become a more popular way of borrowing money in recent years. But what exactly is an equity line of credit? Depending on where your house or condo is located and how long you've owned it, you may have accumulated some equity in it. Equity refers to the capital you have built up in your home through appreciation and the money you've put towards the mortgage.
When people tap into their home equity for cash loans, using their homes as collateral against the loan, they are getting a home equity line of credit.
Why a Home Equity Line of Credit?
Home equity loans have become more common for several reasons. As housing values have increased substantially around the country in recent years, more homeowners are finding that their homes have equity. That money can be accessed through a home equity line of credit, and then used to pay for home repairs and renovations, college tuition, health care costs, or a variety of other needs.What to Ask Mortgage Lenders
It's important to do your homework when it comes to shopping for a home equity line of credit, as there are many types of home equity loans. Ask your mortgage lender about their different types of loans. They will probably offer fixed rate, variable, and introductory-rate loans.With a fixed loan, the interest rate will remain constant throughout the life of the loan. These loans usually come with higher monthly payments. Variable rates can adjust upward at different points throughout the loan life. Be very sure you understand how much the rate will increase and how often to be sure you can afford the monthly payments. Introductory rates often offer low initial monthly payments, which eventually increase.
Don't be afraid to ask you mortgage broker questions about your home equity loan options. Understand your contract, do your research, and tap into your investment as a well-informed consumer.
Source
Federal Trade Commission: Home Equity Credit Lines
About the Author
Sarah Clark is a freelance writer specializing in a variety of consumer topics.
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