Ask Shop Rate: Albert - Georgia

Posted by  on Apr 16, 2009
I am not sure exactly what a home equity loan is. Can I obtain one to help pay my credit card debt down? The answer to your question is yes. Home Equity Loans and Home Equity Lines of Credit are a second mortgage that allows the homeowner to convert equity in the home into cash. In both cases, your home is used as collateral for the loan. The equity in your home is based on the amount of principal left on your home as well as the current market value of your home. Consequently, you can finance up to the difference of what your home is worth minus the principal left on the home. These loans usually have shorter terms than a standard mortgage (usually between 5 to 20 years). Home Equity Loans and Home Equity Lines of Credit are often used by homeowners to make home improvements, pay for the college education of an offspring, or pay off credit card debt.

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