Home equity loans - can someone give me a primer?

[grinningghost]

I'm getting ready to look for a home equity loan, but I admit, I don't know much about them. So I don't look like a complete moron, can one of you financial whizzes give me a basic lesson in what they are and how they work? I would be grateful.

 

[Bob Slydell]

Typically, you can get a home equity line of credit (typically they're called that because you don't necessarily have to take all the money out at any given time) for an amount equal to 80% of the value of your home minus outstanding principle on your primary mortgage. That value can be adjusted depending on your credit rating.

It's usually left open for a certain number of years. You can take amounts out, as needed, to pay for things up to the total amount of the equity line. When you take an amount out, you need to pay, at minimum, the interest on that amount, keeping in mind that at the end of the equity loan's term, you need to pay off the remaining balance.

 

[Bob Slydell]

Here's a link that might help as well: http://www.home-equity-loan-information.com/home-equity-loan-basics.html

 

[septbride2002]

I see Home Equity Lines for a living. Please feel free to PM me.

~Amanda