Home equity loans are term loans that are taken out against the value of your home already paid or the amount of the home owned. For example, homeowners who have paid 25% of their full outstanding loan balance, say $50,000 of a $200,000 mortgage, have that much equity in their home or how much of their home they actually own.
While understanding the basics is imperative for applying for a home equity loan, knowing when to apply for one is just as important.
Here’s a quick guide to the top three reasons most homeowners take out a home equity loan:
Home improvement projects can be taxing on both the homeowner and the homeowner’s budget. However, if the repair is one that will add value to your home, looking into a home equity loan may be a decent option.
This is usually a great way to reinvest your home equity back into your home, especially if you’ve already paid a significant portion of your mortgage’s outstanding balance.
For those attempting to defeat high-interest rates and consolidate their credit, utilizing your home’s equity could be another excellent way to manage your financial situation. Many who have adapted to this type of refinancing have found that taking out a low-interest, term-based loan like a home equity loan helped them regain their financial standing.
By using a home equity loan, they’ve managed to reduce their monthly payments in other financial areas and regained their monthly budgets.
Sometimes life happens. It can also happen in a way that’s more expensive than expected or just as costly as anticipated. Regardless of whether you’re paying for a ceremony, helping with a college tuition or simply need the extra money for an unexpected circumstance, a home equity loan can help you manage your expenses.
Just as with debt consolidation or home improvement, applying for a home equity loan during your more expensive life events can help you keep the payments manageable without over stressing you or your wallet.
Home equity loans are excellent ways to make your home and monthly mortgage payments work for you.
If you find yourself wanting to reinvest in your home or simply need an extra bit of assistance, reach out to a lender of your choosing and ask what options they have available for you. They have formulas and methods that can calculate home equity loan rates based on your specific needs and circumstances.
In twenty five years of real estate sales and marketing experience, I have sold hundreds of properties, while developing detailed knowledge of Sonoma & Napa area communities. I am a life-long resident in the North Bay and after a full day at work, I enjoy spending time with my four children, and participating in their many school and recreational activities.
Over the years, my clients have expressed diverse plans and dreams. I seek to truly understand and appreciate my clients' goals, focusing my efforts on realizing them. It has been fun learning more about the unique opportunities that attract people to the area such as the culinary community, the viticulture and wine industry as well as outdoor adventure tourism. It is important to me to listen to my clients, do what it takes to serve their needs and I am dedicated to treating everyone involved in a transaction both in a personal and professional manner. I work hard to anticipate and respond to the routine tasks at hand as well as the complex challenges that come up during real estate transactions while ensuring my goal to deliver you the outcome you desire.