Home equity loans?
Just wondering if you pay them off monthly? And if yes how long do you typically have to pay them off and whats there interest. Thanks
- babyboomer1001Lv 73 years ago
Yes, monthly, 20 or 30 years depending on the bank, the interest varies greatly from bank to bank and credit union to credit union.
- SlickterpLv 73 years ago
Yes, monthly. Depend son the terms you sign for.
- loanmasteroneLv 73 years ago
A home equity mortgage loan is applied for and approved.
You would be required to pay this mortgage loan off monthly based on the terms of the mortgage loan. The terms could be 5, 15, or 20 years.
The interest rate you would be charged would be based on your credit score. The higher your credit score, the lower you interest would be.
#1. You are able to apply for a refinance of your existing mortgage loan. This refinance would pay off your existing mortgage loan and replace it.
#2. You are able to apply for and be approved for a 2nd mortgage loan. This mortgage loan would be in addition to your first mortgage loan. You would have two monthly mortgage payments.
#3. You are able apply for and receive a Home Equity Line of Credit (HELOC) This mortgage loan would be a loan where you would have a specific amount you would be approved for. You would be issued checks and use the amount of money as you see fit. Your interest would be based on based on your credit score, however, you would not be required to pay on this type mortgage loan until you have used any of the funds. Also your monthly payment would be based on the amount of the funds you have used.
You might want to contact a local mortgage lender to get a full understanding of the various mortgage loans available to you. You might also be provided literature that would cover the various mortgage loans you are able to apply for.
I hope this has been of some benefit to you,good luck
- Elaine MLv 73 years ago
Yes there's a monthly billing, same as for mortgages. How long depends on what you signed up for, and what rate was going on at the time. I took a home loan out, it goes for 20 years, it's up to a $50,000 line of credit, there when I need it. Paying off what I use was billed at $150 a month, but there was no pre-payment penalty so I put more towards it when I could. I used the loan to replace the furnace ($5,000) and for home repair ($8,000, which included reshingling the roof). It's paid off completely now, but the loan continues for 4 more years so I didn't tell them to close the loan out, just in case of an emergency need. It's listed at 0 payment per month at the moment.
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- David 14Lv 73 years ago
Yes you pay them monthly. Terms and rates depend on the bank.
- Steve DLv 73 years ago
There are types of ways you can use the equity to borrow money. The first is a cash-out second mortgage. This is basically the same as a first mortgage where the bank lends you a set amount of money based on the equity in your house. For example if the house is worth $200,000 and you have a balance of $100,000, you have $100,000 and you can borrow 80% of the value of the house (most lenders will not go over 80% total loan to value) - which in our example is $160,000 - so you can borrow $60,000. You then pay this amount back in monthly payments - like a first mortgage, you can usually take up to 30 years to repay and the interest rate will be a bit higher (usually) then a first mortgage.
The second way to borrow is a Home Equity Line of Credit. This type of loan allows you to tap into the equity some at a time. With a HELOC, you still can't go over the 80% loan to value, so you can still borrow no more than the $60,000 in our example. However, you don't have to borrow all at once - you get a check book and you write checks as you go and the payments are calculated on your outstanding balance. Many HELOCs are open for 10 years and then convert any outstanding balance to a second mortgage. The advantage here is you aren't borrowing money you don't need. Payments on the HELOC balance can sometimes be interest only (not usually a good idea to just pay interest since the outstanding balance does not decline), but you can (and should) pay more.
- Steven SLv 73 years ago
Depends on how the loan is structured. Discuss this with a lending institution.