Here are some best information on home equity loan vs. debt consolidation loan

Home Equity Loan Comparison - Are all Home Equity Loans Equal?

Home equity loans are ideal for obtaining quick cash for debt consolidation, home improvements, etc. Homeowners can acquire loan approvals much quicker than non-homeowners. Because of rising home values, many homes have gained a significant amount of equity. Hence, homeowners are able to tap into this equity and access extra funds.

What are Home Equity Loans?

Home equity loans are similar to other types of loans offered by banks, credit unions, and other financial institutions. The only difference is that a home equity loan uses your property as collateral. Furthermore, equity loans are primarily based on the amount of equity your home has acquired.

For example, if the original mortgage amount was $200,000, and the amount owed to the mortgage company is $130,000, the home has acquired $70,000 in equity. Thus, homeowners may obtain a home equity loan up to this amount. The money can be used for any purpose such as building a cash savings, paying off debt, or establishing a college fund.

Different Types of Home Equity Loans

Homeowners may select one of two different types of home equity loans. One type of home equity loan is a second mortgage. When homeowners obtain a second mortgage, they receive a lump sum of money from the lender. In turn, the property gains a second lien.

Similar to first mortgages, homeowners are obligated to make monthly payments to the holder of the second lien. Because second mortgages are generally smaller than the initial mortgage, payments are considerably less.

Homeowners also have the option of applying for a home equity line of credit. This type of home equity loan offers flexibility. Instead of receiving a one-time lump sum, homeowners gain access to an open line of credit. For an average length of ten years, homeowners may withdraw funds as needed. Unlike second mortgages, lines of credit do not have fixed monthly payments. Rather, payments are based on the amounts withdrawn from the account.

Choosing the Right Home Equity Option

Deciding between a second mortgage and a home equity line of credit may be difficult. However, homeowners must access their personal needs. Second mortgages are more fitting for persons who need immediate cash for a one-time purchase, whereas lines of credit are more suitable for homeowners who require smaller cash amounts over an extended period.

Go to http://www.homeequitywise.com for a Home Equity Loan Comparison.

More Useful Resource and Updates on home equity loan vs. debt consolidation loan

• U.S. Existing Home Sales Rose 3.1% in July to 5 Million Rate (Bloomberg.com)
  Aug. 25 (Bloomberg) -- Sales of previously owned homes in the U.S. rose in July from a 10-year low as declining prices helped stabilize demand. Resales rose 3.1 percent, more than forecast, to an annual rate of 5 million from 4.85 million in June, the National Association of Realtors said today in Washington.



• Baldwin Township couple, among millions facing foreclosure in U.S., turn to nonprofit aid program (Pittsburgh Post-Gazette)
  After 20 years of living in the Baldwin Township home where they raised three children and poured their life's savings, Randy and Cindy Balzer are on the verge of losing everything they've worked ...



• Home sweet loan: Using a 401(k) loan for a down payment (Belleville News-Democrat)
  Faced with a real estate market that has tightened up lending standards at a time when home values are dropping, more people are borrowing money from their 401(k) retirement plans to help swing a down payment to buy a home.



• Web sites help borrowers tap cash (Chicago Tribune)
  WASHINGTON -- Steve Lubs was looking to get rid of his $8,000 in credit card debt, but his high interest rate had him bogged down. He tried getting a loan through a bank to pay off the balance but couldn't find one with an interest rate lower than 12%.



• Home loans: Mortgage approvals plunge by 65% (Guardian Unlimited)
  Situation unlikely to get better until availability of home loans improves and house prices stop falling



• Freddie, Fannie Mortgage Portfolio Growth Rate Slows (Update1) (Bloomberg.com)
  Aug. 26 (Bloomberg) -- Freddie Mac and Fannie Mae bought home loans and mortgage securities at a slower pace last month as a combined $14.9 billion in net losses in the past four quarters depleted their capital.



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