Choose the best home loan
If your current home value is bigger than your outstanding mortgage debt and you need a loan, then a home equity loan is probably your best borrowing choice. Home loans can give you financial freedom by providing credit funds for various purposes, such as home improvements, paying for college education or consolidating debts. Since they are secured against your residence, housing loans have advantages for both borrowers and lenders.
What you should pay attention to
Let's look at the features that make home loans so attractive:
- Home loan interest rates are lower than what you would pay for an unsecured loan, so housing loans are often used to pay off credit card balances or other loans.¬†¬† ¬†
- It is easy to qualify for a home loan even if you have bad credit, because this type of loan is secured by your house.
- Home¬†interest rates may be tax-deductible if you meet certain IRS requirements. Check if you qualify for the interest deductions.¬†¬† ¬†
- You may borrow a substantial amount of¬†money, normally up to 80-90% of the equity in your home, but the exact amount will depend on your credit rating, income and history ¬†¬† of payments.¬†¬† ¬†
- Home loans are safe for the lenders because your home serves as collateral, and in case you fail to pay, the ¬†¬† ¬†lender may force you to sell the house in order to clear the debt (this is called foreclosure).
Home loans have two varieties ‚Äď fixed-rate loans and lines of credit. While fixed-rate loans provide a single sum of cash to the borrower, which he must repay in fixed monthly installments, home equity line of credit (HELOC) allows you to borrow multiple times up to the limit you were approved. The type you choose depends on your purpose of borrowing money. If you need to cover a single major expense, such as buying a new car or repairing your kitchen, then a standard home loan is your best choice. However, if you need several amounts over a period of time, for instance, for a large home improvements project, then go for HELOC.
Use Mike Credit's tools¬†
Before applying for a housing loan, we recommend you to compare the loan plans offered by different lenders. Mike Credit loan finder will enable you to do rate shopping and choose the best deal in a matter of seconds.