Top 8 Home Equity Loan Programs
When you're a homeowner, you possess one of the most valuable assets you can own. But many out there don't fully understand how to really get the most from their home. Home equity loan programs provide a variety of options for borrowers to find a very real way to get extra cash for several reasons ranging from consolidating debt to paying for home repairs and beyond.
2018 is shaping up to be a year with expanded cash out options for homeowners seeking unique home equity loans and alternatives to traditional refinancing.
However, there are far more home equity loan programs available than most realize. As such, finding the right loan for you is something that can take a bit of time and consideration. The following eight programs are among the best you can consider. Each offers its own pros and cons, and each is right for certain people in certain circumstances. As such, they all deserve some consideration. Look at each one and you'll likely find the right home equity program for your needs.
1. Cash Out Equity Loan – The cash out equity loan is one that is among the most common types of home equity loans available. In these loans, your lender will issue you a loan based on the difference between what you currently owe on your home and what it is worth. For example, if you owe $100,000 and your home is worth $150,000, your loan will be based on that $50,000 difference. You won't usually get the full amount, but a heavy percentage instead.
2. Fixed Rate Home Equity Loan – These loans are just what they sound like – a type of home equity loan that is issued with a single fixed rate that won't change throughout the life of the loan. This gives you a large amount of stability and peace of mind that your monthly payments won't change as you go through the years.
3. Home Equity Line of Credit –This is a great loan option because instead of being given a lump sum of money, you're given a line of credit equal to what you could have received outright. Then, you spend from that credit as you would a credit card. You only pay interest on the amount that you have spent, saving you money and helping you manage your finances in a more effective way. If you're not planning on spending all of your cash immediately, this is likely the way to go. See HELOC loan rates today.
4. Solar Energy Loans – This type of equity loan is actually a government grant program that can reduce or eliminate the need to repay it. It's not entirely a loan, however, since you must use the funds on upgrading your home to a solar-friendly energy source. However, qualifying loans can use the solar upgrade to improve equity which will then influence future loans. Ask about the FHA 203K loan program as well.
5. Subprime Second Mortgage – Second mortgages are often a big decision, due to the fact that they will require you to pay two loans back at once – your original mortgage, and another. But these subprime second mortgages are really the only option for those with bad credit who can't secure any other type of loan. If you're struggling to gain approval for other loans, these may be worth considering. Just remember that interest rates will be higher than most other 'prime' loans will carry.
6. Bad Credit Home Equity Loan – There are indeed some equity loan programs out there that are intended specifically for those with bad credit. From FHA loans to programs through Fannie Mae, these loans are designed to be easier to qualify for while still giving you the funds you need for what you're trying to accomplish. Again, pay attention to interest rates and terms to ensure you get the best possible one for your money. If you are rejected for the equity loan, consider a cash-out refinance for bad credit.
7. HELOC with Fixed Rate Option – The HELOC is the same line of credit type of loan we mentioned above, but with this option you get a flat, fixed interest rate. Traditionally, HELOC loans have come with variable rates. But this option gives you the chance to increase stability and get the funds you need at the same time – all while still only paying interest on what you use, as you use it. It's an even better option for those looking for a great equity loan.
8. Home Equity Loan For Refinancing Debt – Some home equity loans are designed to give you freedom to do what you wish with funds. But others are specifically utilized to refinance debt and reduce your monthly payments. This can help you improve your overall financial situation in a big way.
All in all, you have plenty of options available to you when you're ready to start refinancing your home. Check today's cash out refinance rates. Pay attention to the options above and think about which one is right for you. Then, talk to a lending professional to get any additional info you need. If you research properly, you'll be able to find a loan that works perfectly for you and your current loan needs.