Fixed Home Equity Loan - A Closer Look

A home equity loan is a loan that is taken out by a homeowner who uses his or her home as a sort of collateral. The amount that a homeowner is allowed to borrow is based on a percentage of the amount of equity that has been built up over the mortgage repayment period. An appraiser will evaluate the home and decide how much it is worth. Then the bank will look at what the home is worth and look at how much the homeowner has paid on his or her mortgage. The amount that a person can take out in a home equity loan is based upon a percentage of those two numbers. Typically there are two types of home equity loans: the fixed and adjustable.




The fixed home equity loan is a loan in which the interest rate is fixed. This is both good and bad.



It is good for people who live by a strict budget. The monthly payment is steady. It does not fluctuate, no matter what the interest rates are doing. They also usually come with different repayment options and the interest portion of the loan payment is typically tax deductible (like the interest paid on student loans is tax deductible).



This type of loan can be bad because you might end up paying more on the loan than you should. Most loan interest rates are based on information gathered by the banks, the government and what the interest index is doing. This means that, with an adjustable rate home equity loan, your interest loan will always be what the bank says it is, while with a fixed home equity loan, your interest rate remains static, even if the bank says it should be lowered. In the long run you could end up paying much more on your loan than you should have.



There are pros and cons to the fixed home equity loan, also known as a fixed second mortgage. Make sure you do your research before you sign any papers.



Need more information on how to get a fixed home equity loan, visit http://www.100homeequity.com where you can get tips, and resources for obtaining a 100% home equity loan.



Article Source: http://www.EzineArticles.com/?expert=Max_Suther

Welcome to the Fixed Home Equity Loan website

Welcome to the Fixed Home Equity Loan website blog.   The fixed home equity loan is a loan in which the interest rate is fixed.   The fixed Home equity loan thus allows the homeowner to plan on and budget the payments for their fixed home equity loan

The Fixed Home Equity Loan will have the best information and aticles and lists of articles on Fixed Home Equity Loans.