Home Equity Loan
Homeowners have several cash out options with low rate home equity loans. They are considered second mortgage loans, because borrowers do not need to refinance their first mortgage to get the cash. There are 2 types of home equity loan options. The fixed rate home equity loan is the lump-sum loan that has a fixed interest rate. The second option is the home equity line of credit and this is an opened end loan as the borrower only pays interest on the portion of the equity line that they use. Home equity lines have a variable interest rate and the payment due is interest only. Home equity credit lines are commonly used for home improvement projects and emergency funds. Home equity loans are more commonly used for purpposes of refinancing adjustable rate loans and consolidating debt. Home equity loan rates have been at record lows in 2010 and the Federal Reserve has set the credit line rates at record levels as well. If you have an adjustable rate second mortgage, we recommend refinancing and taking advantage of low fixed home equity rates.
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