Elmo Crib Set

If you need to borrow money, home equity credit lines may be one useful source of credit. Home equity credit lines may provide you with large amounts of cash at relatively low interest rates. In addition, they can provide you with certain tax advantages unavailable with other kinds of loans.

Popularity And Different Loan Types

Borrowing through home equity credit lines has become a popular source of consumer credit. Lenders are offering these home equity credit lines in a variety of ways. You will find most loans come with variable interest rates, some come with low introductory rates, and a few come with fixed rates. Also, you may find most loans have large one-time upfront fees, others have closing costs, and some have continuing costs, such as annual fees. You can find loans with large balloon payments at the end of the loan, and others with no balloons.

Not every type of loan is right for any homeowner. The challenge, then, is to contact different lenders, compare offers, and select the home equity credit line adequate to your needs.

Home Equity Credit Lines Drawbacks

Home equity credit lines require you to use your home as collateral for the loan. This may put your home at risk if you are late or cannot make your monthly payments. Those loans with a large final (balloon) payment may lead you to borrow more money to pay off this debt, or they may put your home in jeopardy if you cannot qualify for refinancing. And, if you sell your home, most plans require you to pay off your home equity credit line at that time. In addition, because home equity loans give you relatively easy access to cash, you might find you borrow money more freely.

Alternatives: Home Equity Loans

There are other ways to borrow money from a lending institution. For example, you may want to explore second mortgage loans. However, these plans also place an additional mortgage on your home; second mortgage money usually is loaned in a lump sum, rather than in a series of advances made available by writing checks on an account. Also, second mortgages usually have fixed interest rates and fixed payment amounts.

Other options include borrowing from credit lines that do not use your home as collateral. These are available with your credit cards or utilizing unsecured credit lines that let you write checks as needed. In addition, you may want to ask about loans for specific items, such as cars, boats, or tuition.

Before rushing in, you should consider all your options and see whether you would benefit from a home equity credit line or you would do better with other financial product. And if you decide to request a home equity credit line, request different quotes and compare what each lender has to offer. Youll soon learn that by bargaining a little you can get great deals on home equity credit lines.

Sarah Dinkins is an Expert Loan Consultant at Badcreditfinancialexperts that helps people to repair their credit and get approved for home loans, unsecured personal loans, student loans, consolidation loans, car loans and other types of loans and financial products. At http://www.badcreditloanservices.com/article/ find more useful finance articles.

There was a time when pensioners who were living off their state pension and struggling with day to day living expenses just had to make ends meet without any additional financial assistance from the state.

However, there has been a staggering increase in the number of people who are starting to realise that their property holds the key to a large chunk of finance to help make life just that little bit easier. The release of this finance is done through what's called a 'home equity loan' or just 'equity release'. This allows the applicant to get a lump sum or a regular monthly income.

This type of equity release finance can be realised in one of two ways.

One is called the 'lifetime mortgage', highly regulated by the FSA, where the homeowner takes out a secured loan. This is a loan secured on the property and is normally around 40% of the house value. The interest on the loan is then accumulated and repaid along with the capital when the homeowner dies. Or if the homeowner goes into care and the house is sold off.

The second type of equity release is called a home reversion plan and they are completely different than a loan. With this method the property is sold to a provider for a lump sum and the homeowner remains in the property. At death the sale of the property helps to pay the lender and any money left over is given to the relatives.

The home reversion plan has only come under regulation recently and with good reason. In the past it was deemed to be a property sale rather than a loan so it avoided any proper regulation. As a result a lot of companies were not very ethical in their selling and many people in vulnerable circumstances were convinced to sell their properties at massive discounts.

Now, anyone who feels they have been mis-sold a reversion plan can complain to the Financial Ombudsman Service can potentially claim up to 100,000.

Conclusion

Home Equity release plans can be a great way to help ease your financial situation in your later years of life. However it is also a complicated area so you should seek the right advice from the right people. In the UK one such body is the Safe Home Income Plans, which is an equity release trade body and they can provide you with excellent advice on the right product to take out for your circumstances.

Paul Hockney is an online loan expert who provides Fast Homeowner Loans tips and advice.