Bad Credit Home Equity Line of Credit Loans – Three Things to Know

Bad Credit Home Equity Line of Credit Loans – Three Things to Know
By Carrie Reeder

Home equity line of credit loans can get you the money you need to consolidate debt, make home improvements, pay college tuition, and much more. Though bad credit home equity lines of credit are available to those who need them, there are a few things borrowers should know before applying.

Rates Will Vary

Interest rates on bad credit home equity line of credit loans can vary significantly. To make sure you get the best rates, you will want to get at least three quotes before accepting an offer.

You will also want to keep in mind that though bad credit will require you to pay higher rates, you are still entitled to fair treatment. Make sure the rate you are being quoted is in line with what someone with your credit score should pay. Multiple quotes will help in this respect as well.

Terms and Conditions Can Vary

Different lenders offer different terms on bad credit home equity line of credit loans. Before signing any papers, make sure the terms and conditions on your loan are reasonable for your financial situation. You don't want to get yourself into a tight spot by agreeing to pay back more money in a specific time period than you can afford.

Fees Will Vary

As with almost any loan, there are fees associated with bad credit home equity line of credit loans. Most borrowers end up paying many of the same costs that were paid out with the original loan, such as title fees and points.

These costs can add up fast and vary depending on the lender that you work with. Before taking out a bad credit home equity line of credit, you will want to make sure you fully understand exactly how much the loan will cost you.

Article Source: http://EzineArticles.com/?expert=Carrie_Reeder

Bad Credit Home Equity Line of Credit Loans – Three Things to Know

Fixed Rate Home Equity Line of Credit - Sounds Good, But Is It?

Fixed Rate Home Equity Line of Credit - Sounds Good, But Is It?
By Peter Kirkham

Sometimes you can save a little money on the front end with a variable rate home equity line of credit, but a fixed rate loan will be more predictable, and you'll always be able to budget for your loan payment every month because the minimum payment will be unchanging. There are several different reasons that people will take out a fixed rate home equity line of credit, so if you're thinking about doing any of these things, this is an option you might consider.

One traditional reason that people take out a line of credit on their home is for home improvements.

If you moved into your home several years ago and are ready to start laying new flooring, replacing kitchen appliances, or doing more major repairs and renovations like adding on or knocking out walls, a fixed rate home equity line of credit could be a good way to go. One way to be sure that this line of credit pays off is to insure that the improvements you're making will actually increase your home's value.

This way, you're taking out a line of credit against your home's current value, but you're making your home worth more, which actually raises the equity you have in it. Don't, however, improve your home for more than it would sell for in your neighborhood; even if you plan on staying in your home for a while, you'll still want it to be salable just in case, and you can't sell a house that's worth much more than those in the surrounding neighborhood.

To be sure that you aren't putting more money into your home than you'll get back out of it, check out the average prices of the homes in your neighborhood, and don't add a lot of features that your neighbor's homes don't have.

Another reason to take out a home equity line of credit is to make a major purchase. Maybe you want to take the vacation of a lifetime, or maybe you want to put a pool in the backyard. Either way, be sure that you're making a wise financial decision and that you'll be able to pay back the loan easily.

Also, see what you'll end up paying once the interest rate is added in. You don't want to end up paying $15,000 for your $10,000 vacation when you could have saved up for part of it in the first place!

One final reason that some people use a fixed rate home equity line of credit is to consolidate existing debts.

While a line of credit isn't the exact same thing as a home equity loan, it can be used in much the same way. You'll use the credit you get because of your home's equity to pay off higher-interest debts like credit cards and cars. Then you'll be left paying off the line of credit on your home, which probably lowers your monthly payments and certainly lowers your interest rates.

This can be a helpful financial move if you're in a lot of credit card debt.

Article Source: http://EzineArticles.com/?expert=Peter_Kirkham

Fixed Rate Home Equity Line of Credit - Sounds Good, But Is It?