Credit Secrets & Tips Blog

Consider carefully before taking out a home equity loan.  Although This type of loan might let you take tax deductions you could not take with other types of loans, they can
reduce the equity that you built up in your house.  And if you are unable to make payment promptly, you could lose your house!
 
Home equity loans can either be a revolving line of credit or a one-time, closed-end loan.   Revolving credit let you choose when and how often to borrow against the equity in your home.  In closed-end loan, you receive a lump sum for a particular purpose, such as remodeling or education tuition.
 
Apply for a home equity loan through a bank first.  Bank loans are likely to cost less than the loans offered by finance companies.
 
When comparing loan offers, read all materials and ask following 7 specific
questions before you sign up:
 
 1. What is the minimum monthly payment?
 
 2. What is the annual percentage rage (APR)?
 
 3. If the interest rate is adjustable, how much can it increase at one time?
 
 4 What is the maximum interest rate?
 
 5. What are the annual and transaction fees?
 
 6. If the loan is for revolving credit, how large a credit line is available?
 
 7. What are the initiation fees for a closed end loan?