Question : How does a home equity loan work?
I need to know all the details and if it is a good choice. I have payed off my vehicle and credit cards and have none, but I have alot of student loan debt. Our dilema are the student loans. And paying them. I have heard about home equity loans and heard about being tax deductible. How do they work? Do they look bad on your credit? How much can you borrow ? Does it add to the years to pay off your house? We only have eleven years left to pay as it is right now. Just wondering what is a good option. I even thought that after I graduate and am working that my pay checks can go all to my student loans. I am just looking for some good ideas without having to stress out about debt and bills and such. We are trying to pay our bills off and so far have done good. But those student loans are looming in the background.
- asked by newmoon
All Answers:
Answer #1
a home equity loan is a loan tha you can borrowfrom. its just like a second mortgage. yes it willadd to how much longer you will own you home. youcan borrow the difference in how much left youhave to pay on your home and what you alreadypaid. shot me an email if you would like me tohelp you get this loan. depending on what stateyou live in.
- answered by cmruffin1
Answer #2
I'm not sure why you would want to get a homeequity loan to pay off student loans. Typicallyinterest rates on student loans are much lowerthan home equity loans. It is true that you canuse interest paid on a home equity loan as a taxdeduction, but you can also use interest paid onstudent loans as a deduction.
- answered by PCL-R
Answer #3
Pulling equity out of your house does not soundlike a good option to refinance your studentloans. You said you are trying to pay your billsoff, what you will actually be doing is tradingout student loan debt for home equity debt, whichis a bad trade off and is not paying off yourbills since you won't be reducing your debt. Mostlikely the student loans will carry a lowerinterest rate than the home equity loan, but moreimportantly, if you can't afford to make studentloan payments at some point in your life yourlender will work with you because it is unsecureddebt. If you fall on hard times and can't payyour ORIGINAL purchase money mortgage, the lendercan foreclose on your home since that was thecollateral but (in most cases) can't come afteryour other assets. When you refinance your home,pull equity out of your home, or accrue anynon-purchase money debt against your home you areexposing the rest of your assets to your lender. If you elect to do what you suggest and you areunable to make payments at some point in yourlife, your lender can come after all of yourassets as opposed to none, with the studentloan.Also, student loan interest is taxdeductible.
- answered by Chris M
Answer #4
If you have equity in your house, you couldrefinance, or you could take out a home equityline of credit. You may get a better rate on therefinance, but the home equity line of credit isan entirely different loan, and will not affectwhen you have your house paid off. I specialize inboth of these loans, and either one is effevtivefor consolidation of debt. Shoot me an email, andI'll poimt you in the rightdirection.msmith@premierloangroup.comMarty
- answered by Marty S
Answer #5
Like any other type of loan, there are somefactors you should look into carefully in the badcredit home equity loan. Check out the interestrates and conditions of the loan before taking anydecision. Most of the times, they are notborrower-friendly like those for the good creditcostumers. But this is due to the fact that badcredit home equity loan companies take on morerisk by lending to persons with bad credit andthey want to compensate their risk. When you shoparound for the rates, you can get a better rate,though not as good as the rate for the good creditcustomers.The loan conditions and the credit ratedepend on the credit reports and other financialstatistics. You get a number between 300 and 900that denotes your credit rating. This number isused to give the terms for your home equity loan.If your credit rating is at least 600, you can getthe home equity loan easily. But if it is below600, you should apply for a bad credit home equityloan and you should negotiate the best possibledeal you can afford. But you can help yourself bypaying the installments within the specified time.
- answered by mey t
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