Home Equity Mortgages

Home Equity Mortgages
Home equity mortgages are loans that use the​ equity on​ the​ home as​ collateral .​
Home equity is​ the​ difference between the​ current value of​ the​ home and the​ amount owed because of​ the​ mortgage/mortgages .​
a​ home equity mortgage can also be said to​ be a​ second mortgage since the​ extra cash generated can be used for home improvements,​ thus increasing the​ value of​ the​ house further .​
Like regular home mortgages,​ home equity mortgages also use the​ property/ home as​ the​ security .​
in​ case of​ default,​ the​ lender has the​ right to​ take over the​ home .​
There are many advantages of​ taking a​ home equity loan: it​ would reduce the​ current loan burden if​ taken at​ a​ lower rate; the​ funds generated can be used to​ pay off high interest debts like credit cards; sometimes,​ home equity mortgages enable some tax savings; they can be used to​ exchange the​ present mortgage for a​ shorter term mortgage .​
Other advantages include: lower closing costs,​ and faster closing.
Home equity mortgages are ideal for people who are planning to​ use their home equity to​ finance something else .​
They are also good when the​ borrowers are planning to​ sell their house soon,​ since short-term equity loans have lower rates .​
Equity mortgages are preferable when the​ loan amount is​ smaller .​
Generally,​ equity mortgage rates are higher than first mortgage rates .​
They are also riskier because of​ their second-lien position .​
The rates of​ home equity mortgages depend on​ the​ frequently changing Wall Street Journal prime rate .​
Long-term home equity loans tend to​ have higher rates than even fixed rate mortgages .​
With increasing real estate prices,​ many people are considering home equity mortgages .​
Lenders are also giving many attractive offers on​ equity mortgages .​
a​ good past credit rating is​ an​ important prerequisite for obtaining a​ home equity mortgage .​
The best source for knowing about home equity mortgage rates is​ the​ Internet .​
Most mortgage loan companies provide information through their websites also .​
These rates are updated daily .​
Their sites also have easy-to-use home equity mortgage calculators that give all information,​ including payments to​ be made each month and the​ tax advantages,​ with the​ single click of​ a​ button .​
Most of​ them also have financial advisors who would provide advice online,​ or​ over the​ phone.

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