Home Loan Info

Assisting You In Your Home Loan

Home Equity Loan Rate

The simplest way to find out how much your rate will be is to calculate how much your loan amount is going to be, what the interest rate is, how many months you will have to pay back the loan, and your state and local taxes. These taxes are important because they will change the amount owed on the loan and many people forget about them and then wonder why the payment isn’t what they were quoted and thus budgeted for.

Depending on how much your home is worth and what you owe on your current mortgage loan can make a difference in how much you can borrow. Depending on the bank, you can borrow 80% up to 150% of your total home value. It is calculated by figuring how much your home is actually worth minus what you still owe on the loan.

So if the home is worth $80,000 and you still owe $65,000, you can borrow about $15,000-45,000 with a home equity loan. The more your home is worth and the less you owe, the more equity you have and thus the more you can borrow. The interest rate will be fixed for a certain loan time.

Now a home equity line of credit will work the same way to determine how much money you can borrow, but it will be a revolving type account, and you can pay it off and then take more money out during the loan period if you wish.

Of course the interest payoff will be more because it is revolving and not a set amount as a one time loan given to you. Just be careful not to overextend yourself by getting a home equity loan because it can easily turn into bad debt that you don’t have a way to pay off with another home equity loan.