Why you Might Need a Home Equity Loan

Home equity loans are secure loans that you take out against part of the equity in your property. For instance, if your home is worth $200,000 and your mortgage is only for $70,000 you have equity of $130,000. You can borrow anything up to $130,000 against the equity that remains. The equity in that home then become collateral that is held against the loan until it is paid off. You ordinarily need an excellent credit history if you want a home equity loan. However, there are times when the loan-to-value might tip the balance in your favor if your credit history is not pristine. For example, if you have $130,000 in equity but only want to borrow $15,000 you have a better chance, even with bad credit, to get a loan for that small amount, rather than a loan for $100,000.

A home equity loan works in the same was a your mortgage, but could be with a different provider to the current mortgage you hold on your property. Also, your loan would not be for the same length of time?the term of the mortgage?as the original loan and you should note that you are not permitted to purchase a home using a home equity loan as a mortgage. You must purchase the home with a mortgage and then you can use the equity to refinance.

Most home equity loans are used for the purchase of an item or other property, where saving up for it would take a long while. You may find that you need to borrow against the equity in your home to pay for a new vehicle or another property or medical bills.

Home equity loans in Carson City would be funded by either a credit union, a State bank or a national bank. People who need a home equity loan are usually trying to find money for an important reason. A home equity loan is long term loan and if you need to purchase a new car or an RV or just pay for a vacation you might decide against a home equity loan simply because you will be paying it off for far longer than the memories of the vacation will last.

A home equity loan may also be tax deductible, so if you need to take out a loan you can count it on your tax forms. You should also be aware that there may be fees deductible when you choose to take out that type of loan. You will pay appraisal fees for the appraiser to value your home, title fees, arrangement fees and possibly a closing fee, but check everything with a good financial advisor before you decide or sign anything.


To find home equity loans in Carson City, call in at Great Basin to find out about their credit union services and loan options.

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