by: Charlie Essmeier
Home equity loans and lines of credit are useful tools for homeowners. They allow the homeowner to borrow against the value of his or her home for all kinds of purposes ? home improvement, debt consolidation, vacations, and more. The loans, backed by the value of the house itself, come with attractive interest rates and the added bonus of tax deductible interest. That interest, however, is often variable, adjusting up and down with changes in market conditions. At the moment, conditions are such that interest rates for adjustable rate loans are increasing while rates for fixed-rate loans are still fairly stable. This is probably a good time for homeowners with variable rate equity loans to consider consolidating their primary mortgage and home equity loan into a single entity.
The ideal candidate for such a consolidation would be a homeowner who has a variable rate home equity loan, rather than a line of credit or an equity loan at a fixed rate. A line of credit is sort of a revolving loan, with an amount that may be drawn, as needed, time and again, much like a credit card loan. A home equity loan would represent a fixed amount of money borrowed for a specific length of time. To consolidate a home equity loan and a primary mortgage, the home would have to be refinanced with a new mortgage issued for the combined amounts of both loans. There are costs associated with this, so homeowners should consider the following:
# Refinancing costs ? It may cost several thousand dollars to combine two loans into one. A home appraisal will be required, along with paperwork fees, filing fees, and possible points paid at closing. A homeowner should make sure that he or she will remain in the home long enough to offset the additional costs of refinancing, otherwise the savings of consolidation are lost.
# Interest rate on the primary mortgage ? If you have financed or refinanced your home during the last three years, your primary mortgage rate may already be lower than the rate you could get today. You don?t want to raise your overall interest rate just to consolidate the smaller amount of money from a home equity loan.
# The amount of money owed on the home equity loan ? The larger the amount of money owed on the equity loan, the greater the benefit of consolidation. You wouldn?t want to refinance your home over an equity loan balance of $1000, but you might want to do so if the balance is $50,000.
Market conditions change regularly, but now is a good time for anyone with a variable rate home equity loan with a considerable balance to consider consolidating the equity loan and the primary mortgage into a single loan. If you aren?t sure if you can benefit from this, you may wish to consult with your lender.
About The Author
©Copyright 2005 by Retro Marketing. Charles Essmeier is the owner of Retro Marketing, a firm devoted to informational Websites, including HomeEquityHelp.com, a site devoted to information regarding mortgages and home equity loans .
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A Look at Common Types of Loans
A Look at Common Types of Loans
by: John Mussi
People sometimes wonder about common types of loans, especially with all of the different types of loans available.
There are many common types of loans that may fall into the same categories, as well as some common types of loans that are only different in one or two small ways.
Below are the descriptions for several common types of loans, including some of the factors that may restrict who is eligible for the loan and how much interest different individuals might have to pay for the loan.
Of course, this doesn't cover all of the loans that are offered? only the loans that you are most likely to encounter.
Secured and Unsecured Loans
Most if not all common types of loans fall into one of two categories? secured loans and unsecured loans.
Secured loans are those loans that use some object of value, which is referred to as collateral, as a guarantee of repayment...
A Look at Common Types of Loans
Mortgages > A Look at Common Types of Loans
Understanding Fixed-rate Mortgages
Understanding Fixed-rate Mortgages
by: Chileshe Mwape
A fixed-rate mortgage is a mortgage on which the interest rate is set for the term of the loan. Your interest rate stays the same for the term of the mortgage or for a specified period of time. Most people use a fixed-rate mortgage. In fact, about 75 percent of all home mortgages have fixed rates. The main advantage of a fixed-rate mortgage is that you always know exactly how much your mortgage payment will be, and you can plan for it.
A Fixed Rate mortgage will offer you the security of knowing that your mortgage interest rate will not change during the term of your fixed rate. For example, a lender can offer a 30-year fixed loan to a homebuyer at a 6.5% interest rate. The loan is locked in to the 6.5% interest rate, even if the market interest rate rises to 8.0%. Conversely, if the market interest rate decreases to 4.5%, you will continue to pay the 6.5% interest rate. A Fixed-Rate Mortgage...
Understanding Fixed-rate Mortgages
Mortgages > Understanding Fixed-rate Mortgages
The Principal Facts of an Interest-Only Mortgage
The Principal Facts of an Interest-Only Mortgage
by: Tanu Javeri
You are buying the house of your dreams with an interest-only mortgage. You'll get a low mortgage payment, and you'll maximize your tax deduction, all on your current income! Everything seems to be going good. But have you really understood the concept of interest-only mortgage and how it functions.
So What Is An Interest-Only Mortgage?
Well it may break your bubble but there is no such thing as an interest-only mortgage -
because eventually you'll have to pay the loan principal as well. In other words, with an interest-only mortgage loan, you pay only the interest on the mortgage in monthly payments for a fixed term. After the end of that term, usually five to seven years, you pay the balance in a lump sum, or start paying off the principal. Net Net! What you're really getting is an interest-only payment method which can be combined with any type of traditional...
Mortgages > The Principal Facts of an Interest-Only Mortgage
Comparing Mortgage Rates
Comparing Mortgage Rates
by: John Mussi
When you're getting ready to buy a new house, you're likely going to be confronted with a variety of mortgage options. You might have to choose whether to apply for a standard loan or a balloon mortgage, as well as whether to go for a shorter loan term like 10 years or a longer term of 20 or 30 years.
Regardless of the type of mortgage loan you choose, though, you're going to need to pay special attention to the interest rates that are offered. After all, you'll likely be paying interest at this rate for quite some time? if you find a fixed rate mortgage, you might even be paying that interest rate for 10 or 20 years or more!
Here is some basic information about mortgage interest rates, as well as simple ways that you can shop around and compare interest rates before you commit to any type of mortgage loan.
Defining Interest
The first step to finding a good interest rate is making sure...
Comparing Mortgage Rates
Mortgages > Comparing Mortgage Rates
Home Loans and Mortgages ? Time to Consolidate Loans?
tax help Home Loans and Mortgages ? Time to Consolidate Loans? Mortgages
Home Loans and Mortgages ? Time to Consolidate Loans? skirt Mortgages
Home Loans and Mortgages ? Time to Consolidate Loans?
Discounted Cruises - Things You Should Know
Discounted Cruises - Things You Should Know
by: Dr. Deepak Dutta
What is the same thing did 11 million people worldwide do in 2004? They took a cruise. Of course, some extremely rich people did not take a cruise technically but they used their yachts and spent days in opulence in the midst of the ocean. But for people like you and me, we have to be content with a cruise package offered by various travel agencies. If you think cruising is for old people or your...
Home Loans and Mortgages ? Time to Consolidate Loans? Discounted Cruises - Things You Should Know
Mortgages > Discounted Cruises - Things You Should Know