Can I Use The Equity In My Home To Get A Loan?

May 16, 2010 by · 5 Comments
Filed under: Blog 

The ‘equity’ in your home refers to the amount you have left to repay on a mortgage subtracted from the current market value of your home and for some homeowners, this can add up to a considerable sum if they’ve been repaying their mortgage for quite some time or have completed mortgage repayments and own their home outright. This sum of money is, in effect, ‘locked in’ to your home and a home equity release loan allows you to tap into that sum of cash to fund any purpose.

The crucial thing to bear in mind, however, is that this method of securing cash is not for everybody and careful consideration needs to be taken as you could be putting your home at risk if you’re unsure as to what it involves.

Reasons for taking out a home equity loan can vary but quite often they are used to raise finance for things like extensive home improvement projects or major home renovations which, ultimately, will add significant value to your home anyway and which might possibly even work out to your financial gain in the long term over the cost of the loan.

Then there are other scenarios where, perhaps, an elderly person or couple with a low income may need to raise cash to fund their monthly expenses. They may have fully paid off their mortgage and have no children to consider when it comes to any inheritance issues or they may have children but may not be looking to pass on any of their assets after they’ve died. In these cases too, home equity release might present them with their best option. After all, they’ve worked hard to buy their home in the first place and have now paid it off. Therefore, as an asset it has a significant monetary value but it is tied up in their home’s value. This is typical of the scenario of “cash rich on paper but cash poor on a day to day basis”.

It cannot be emphasised too strongly, however, that a home equity loan isn’t for everyone and you should seek professional advice if you are considering opting to go down this route.

George Whittaker
http://www.articlesbase.com/finance-articles/can-i-use-the-equity-in-my-home-to-get-a-loan-92719.html

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Comments

5 Responses to “Can I Use The Equity In My Home To Get A Loan?”
  1. Tchau Bela says:
    May 16, 2010 at 10:46 am

    Can I get a home equity loan at the same time or immediately after I get a home loan?
    I am a first time home buyer and I want to take advantage of a home equity loan at the same time or immediately after getting my first home loan. Although I am getting a loan for the full amount of the cost of the house, the house has been appraised for more than I am buying it for, so I believe there should be some equity there, right? Can I take out a home equity loan or home equity line of credit at the same time as my home loan?

  2. PooPooLaTrash says:
    May 16, 2010 at 3:48 pm

    In some cases, yes. Here is Schwab’s combo loan package: http://www.schwab.com/public/schwab/banking_lending/mortgages/mortgage_education/loan_types/combo_loans/combo_faqs?cmsid=P-2266791&lvl1=banking_lending&lvl2=mortgages
    References :

  3. dusty_titus says:
    May 16, 2010 at 3:50 pm

    You can only take out a "home equity loan" if your going to improve your home with a set amount (20,30,40,50) loan – The bank will not give you this money, but will allow to spend this money by setting up a separate checking account – that you use exclusively for the Contractors you hire and rental of equipment and purchase of new material – appliances – etc. Even if you are getting a loan for the full amount of the cost of the house, your credit rating is what will allow the bank to set up this separate account for you. Don’t forget you will be paying both the Mortgage and will have to repay the H.E.L. – with a set amount each month. Unless your home is so under priced, and another lender will see the potential – you may get a second mortgage (junior loan) usually only 5% of what the home is appraised at.
    References :

  4. kapn says:
    May 16, 2010 at 3:52 pm

    Go to the bank and ask……every bank is different……..I would expect that it would be approved……..
    References :

  5. Venus says:
    May 16, 2010 at 3:54 pm

    hi
    If you want a legit online loans in 1 Hour.just try this and once approved your loan amount will be transferred directly to your checking account promptly, and securely. Now you’ll be able to use the cash for all your necessities.

    http://goodonlineloancompanies.com

    • processing 100% secure
    • fax less and no credit check
    • Instant online approval
    • fast customer service
    Good luck! ….
    References :

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