If you want a way to free up the cash equity in your home one method to do so is through a 100% home equity loan. With interest rates as little as they are currently the home equity loan has been a very popular option so you can get more cash and a 100% home equity loan takes that even 1 step further. This type of home equity loan might not be befitting you, but you can decide by asking yourself a few easy queries.
How Low is the Interest Rate?
You always want to get a minimal interest rate on any loan, but this is especially true of the 100% home equity loan. Make sure you can't get a better rate by obtaining a personal loan or tapping your credit cards. It's highly likely that the interest rate on your home equity loan would be the lowest you can find, but it never hurts to check first and make certain. Go online and request quotes from a variety of online lenders to obtain a good idea of what their current home equity rates would be for you personally.
You should also know that by borrowing against 100% of your homes' value you will not qualify for the lowest rates, but the rate should still be less than that on credit cards and even personal loans. In addition you obtain a tax savings by taking a home equity loan, so factor that into your final decision as well.
What are the Benefits of a Home Equity Loan?
Your individual benefits will be determined by what you use the cash for. If you're paying off high interest credit cards or making home improvements that will boost the value of your house then by all means you should consider a home equity loan. However, if you want to use the cash to finance a trip all over the world or to go on a huge shopping spree then you should most likely reconsider. Basically, as long as you'll be improving your financial standing with the proceeds of your house equity loan then it makes good sense for you. If there isn't any financial benefit then you should forgo the equity loan and simply save for your purchase.
How Long Will You Stay in Your Home?
The length of time you plan on living in the same house can make an impact in whether or not you want to consider getting a home equity loan. By taking all of the cash out of your home now you're ensuring that there won't be much left if you sell the house within the next few years. Especially with the declining house values you could actually wind up owing more than the home is worth.
While it can make sense for many, you should consider carefully before taking a 100% home equity loan. Once you've taken all the cash from home equity you no longer have that cushion and you might end up missing it in case you have an emergency or even a good opportunity that you would need money for later. If you're benefiting financially then it could be a great move. In any case you'll want to get quotes from several loan companies before agreeing to any home equity loan.
How Low is the Interest Rate?
You always want to get a minimal interest rate on any loan, but this is especially true of the 100% home equity loan. Make sure you can't get a better rate by obtaining a personal loan or tapping your credit cards. It's highly likely that the interest rate on your home equity loan would be the lowest you can find, but it never hurts to check first and make certain. Go online and request quotes from a variety of online lenders to obtain a good idea of what their current home equity rates would be for you personally.
You should also know that by borrowing against 100% of your homes' value you will not qualify for the lowest rates, but the rate should still be less than that on credit cards and even personal loans. In addition you obtain a tax savings by taking a home equity loan, so factor that into your final decision as well.
What are the Benefits of a Home Equity Loan?
Your individual benefits will be determined by what you use the cash for. If you're paying off high interest credit cards or making home improvements that will boost the value of your house then by all means you should consider a home equity loan. However, if you want to use the cash to finance a trip all over the world or to go on a huge shopping spree then you should most likely reconsider. Basically, as long as you'll be improving your financial standing with the proceeds of your house equity loan then it makes good sense for you. If there isn't any financial benefit then you should forgo the equity loan and simply save for your purchase.
How Long Will You Stay in Your Home?
The length of time you plan on living in the same house can make an impact in whether or not you want to consider getting a home equity loan. By taking all of the cash out of your home now you're ensuring that there won't be much left if you sell the house within the next few years. Especially with the declining house values you could actually wind up owing more than the home is worth.
While it can make sense for many, you should consider carefully before taking a 100% home equity loan. Once you've taken all the cash from home equity you no longer have that cushion and you might end up missing it in case you have an emergency or even a good opportunity that you would need money for later. If you're benefiting financially then it could be a great move. In any case you'll want to get quotes from several loan companies before agreeing to any home equity loan.
