Home Equity Loan vs Home Equity Line Of Credit – Debt Consolidation
Home Equity Loan vs Home Equity Line Of Credit
Gary Gresham
Many people confuse a home-equity line of credit with a home-equity loan. With so many different kinds of loans it can get confusing. So lets look at the difference so you can get a better understanding of what works best for you.
Home Equity Line Of Credit
Home-equity lines have experienced unprecedented growth in the past two years and presently represent 80 percent of the home-equity market.
A home-equity line of credit is a varible interest rate loan that works like a credit card. You get a pre-determined loan amount that is secured by your home.
Most come with checks and credit cards that you can use to draw on as you need the money.
Most lenders only require an interest only payment for either 10 or 15 years. After that the loan must be paid in full. The reality is most people will sell their home and pay the loan off before it actually comes due. You could always refinance if you decide you want to stay in your home.
An important thing to remember on a home-equity line of credit is it is based on varible interest rates. These varible rates will cause your payment to change as the interest rates move up or down.
Home Equity Loan
A home-equity loan has a fixed interest rate and fixed payment. These loans are more like a standard second loan on your home. Like a home-equity line of credit, these loans are also secured by your home.
You borrow a certain amount of money for a specific period and get the whole sum at the close of the loan. The payments a on home-equity loan are typically based on 10 to 15 years and are level.
People who arent comfortable with an adjustable or varible rate payment tend to favor a home-equity loan instead of a home-equity line of credit. As interest rates rise, these loans become more popular than home-equity lines of credit.
A home-equity loan will have a higher interest rate because it is fixed. Varible rate loans usually have lower starting interest rates. But if interest rates are rising, a varible rate could catch up or even get higher than what the fixed rate is.
About The Author
Gary Gresham is a mortgage loan officer and the webmaster for http://www.1stopshoppingonline.com. He offers you purchase, refinance, debt consolidation or home equity loans at competitive rates at http://www.1stopshoppingonline.com/home-loan.html
Gary@1stopshoppingonline.com
How to Get a Business Loan in Five Steps. – Mortgage
How to Get a Business Loan in Five Steps.
Dave Miller
Need funds to startup or expand your business Follow these steps:
A lender looks at a loan request in three sections known as the "three Cs". They are:
Credit. Did you pay previous lenders back as contracted
Capacity: Can you afford to pay back this loan
Collateral: If you dont pay back the loan from what asset can the lender recover their principal
Step one is:
1. Identify your strength and weaknesses in the "3 Cs". Do this as would a lender - with a very critical eye. Identify your loan to value ratio and your debt service coverage ratio. If you have reason to believe that you credit is less than sterling, get a copy of your credit report including your credit score
Each lender has different criteria with the cost of the loan being higher as your strength in the "3 Cs" is lower. Step two is:
2. Identify lenders who lend to your level of borrower and to your industry type. Call lenders to get their criteria. Learn about the SBA 504 program and 7A loan guarantees. Find who others in your industry have used for financing.
If there is a gap not a canyon, just a gap between your borrowing ability and lenders criteria, a loan broker may be able to help. They spend their working hours finding second and third tier more aggressive and more expensive lenders and establishing relationships with them. They can act as a salesperson for your project in ways that you as a principal cannot. Step three:
3. If you cannot find lenders on your own, consider hiring a commercial mortgage broker. Be careful - in many areas there is little or no protection under the law for commercial transactions. While a small upfront fee for out of pocket expenses is reasonable, shy away from any that want large upfront payments. If they can do the deal they will be paid very well at settlement. If they cant do the deal they shouldnt be taking your business at all.
Once you identify a list of potential lenders or hire a broker, get prepared. Do not think that the business loan process is merely a matter or forms and paperwork. While there is more paperwork than youd ever want to see, it is more of an inquisition. Step four:
4. Be an expert salesperson for your project. Obviously, we think that your should use FundablePlans.com to build a written proposal. Whatever method you use, know your numbers and be able to defend them. Understand your market and be able to speak competently about it. Know your competition. Most importantly, from step one know your strengths and weaknesses as a borrower and be able to maximize the strengths and minimize the weaknesses.
If you are successful with steps one through four, you will expect to "hit a home run". You may, but most likely you wont. Step five:
5. Dont give up. Where one lender might have too many loans of your type in her portfolio, the next may need exactly your loan to meet his goals loan officers are paid to lend. This is not to say that you should "beat a dead horse", but if you have a viable project, a good presentation and good "Cs", you will be able to get financing.
Good luck with your project, if you have questions about funding feel free to use the e-mail link below.
About The Author
Dave Miller is a business consultant and the creator of FundablePlans.com, an online business plan builder at http://www.fundableplans.com.
dave@fundableplans.xom
What is a Commercial Business Loan – Mortgage
What is a Commercial Business Loan
John Mussi
A commercial business loan is designed for a wide range of UK small, medium and startup business needs including the purchase, refinance, expansion of a business, development loans or any type of commercial investment.
Finance is the lifeblood of a business. Without it you cannot grow.
Commercial business loans are generally available from