How Common are Home Equity Loans?

April 16, 2019

When someone needs funds, they tend to take out a loan. As a homeowner, one of the most common types of loans people consider obtaining is a home equity loan.

Home equity loans are great as they provide owners with a way to receive quick emergency funds. With MaxCash, learn just how common these types of loans are.

What is a Home Equity Loan?

A home equity loan is a type of loan in which you borrow money from your homes equity. Your homes equity is determined by the difference between the market value of your home and your mortgage balance. Basically, a home equity loan is a second mortgage and your homes equity acts as collateral for a lender.

So, if we assume that your house is valued at $170,000 and you have $100,000 left to pay on your mortgage, then your homes equity is currently $70,000.

Market Value     Mortgage Balance            Equity

$170,000        –          $100,000        =         $70,000

Though, your loan will not cover 100% of your equity. You could get upwards of 80% or 90% of your equity, but that will vary lender to lender.

The Two Types of Equity Loans

If you are going to take out an equity loan then you should be aware that they come in two types:

  • A fixed rate loan
  • A line of credit loan

A fixed rate loan is given to a borrower in a lump sum, which is to be repaid over a set period of time. Because this type of loan is fixed, interest rates as well as monthly payments are locked into the same amount throughout the life of the loan.

A home equity line of credit (HELOC) is considered a variable-rate loan and is not given in a lump sum, but instead is used multiple times. With a HELOC, a borrower can use as much money as they want from a preset limit of funds determined by the lender. This can be quite beneficial as it lessens the temptation of using funds frivolously.

However, since HELOCs have variable rates their interest rates could change throughout the course of the loan. This means you could be paying more than you would with a fixed rate loan. Also, if you sell your house, then your equity loan must be paid off before you do.

Are you trying to find a lender to give you an equity loan, but having trouble finding the right one? Well with the help of MaxCash we can take that worry off your shoulders. MaxCash has a large network of lenders across the country and because of that we are able to find our clients the right lender in a fraction of the time it would take anyone else.

But our services don’t stop there, as we offer up our knowledge on all things loan and finance related through our blog. With our ability to find clients an affordable loan from a reputable lender, MaxCash is the best place to start when looking for funding.

What You Will Need to Apply for an Equity Loan

Applying for an equity loan will require you to provide your lender with various documents.

In order to help speed up the process, we recommend you have the following documents ready:

  • The last two years of tax returns
  • W2 statements
  • Past few months of bank statements
  • Proof of income
  • Proof of homeowner’s insurance
  • Recent paystubs

It’s good to have these documents on hand before you apply, as it will help from having to scramble and find everything last minute.

The Time it Will Take to Pay Off an Equity Loan

When you take out any loan, it’s important to know how long you will have to pay off that debt. When it comes to an equity loan, terms can range from 5 to 15 years. Because of such drastic differences in loan terms, we recommend that you consider your finances to determine which loan length is most convenient for you.

So, if you feel that you will need more than 5 years to pay off your debt, it’s best to go with a fixed rate loan. Or if you feel financially secure enough, use a variable interest rate loan.

If you are considering using MaxCash to help secure a home equity loan, check out our informational page on home equity loans to learn more. If you would like to learn more about our methods, find out more about us on our website.

On our website, you can read how we don’t charge our clients, how we help find clients a loan, or how we strive to remain transparent throughout the lending process.

Though, if after all that you still remained unconvinced, then try contacting one of our representatives yourself by calling (833) 207-9052 or writing an email to info@maxcash.com.

DISCLAIMER:
The MaxCash website does not offer or provide loans, but rather, it offers a service. It should not be construed as a lending agent or broker. The site does not endorse any lenders and does not charge visitors any fees. The website owners do not evaluate potential lenders’ applications, nor do they approve or deny credit. The MaxCash website does gather applicants’ personal information and transmits it to lenders that are part of the site’s lending network. No one is required to make use of this website, nor are they under any obligation to begin contact with site operators or to attempt to secure a loan with any of the site’s lending partners. Transmission of your financial and personal information on the website in no way obligates lenders to offer you a loan or any other kind of credit product. Be aware that cash transfer times can vary, depending on the lender and the bank you use. It may be necessary to fax information under certain circumstances. All questions about loans, and any concerns you may have should be directed to your lender. These loans are intended as short-term financial solution to satisfy borrowers’ needs for immediate monetary relief. This is not intended to be part of a long-term financial plan for individuals. These services are not offered in all states. Potential borrows may undergo credit check if lenders choose to use any of the major credit reporting bureaus, including Equifax, Trans Union and Experian. They may also use other alternative sources to check credit ratings. Your request for a loan constitutes your agreement and acknowledgement that (A) your personal data may be shared with lenders and perhaps other third-party partners, and (B) lenders can acquire credit bureau reports that detail your credit history. Reports from major credit bureaus, such as Equifax, Experian and TransUnion may be obtained and used to evaluate your reliability as a borrower.

1Loan amounts by the lenders vary based on qualifications.

2Since we do not lend money directly we cannot offer you a solicitation for a loan. In all serviced states we WILL match you with a lender based on the information you provide on this website. We will not charge you for this service and our service is not available in all states. States that are serviced by this Web Site may change from time to time and without notice. Personal Unsecured Loans are not available in all states and all areas.

3Loans such as, Auto Title Loan companies typically do not have pre-payment penalties, but we cannot guarantee that every lender meets this standard. Small Business Loans typically do have pre-payment penalties and occasionally will use your car as collateral to secure the loan. Other types of loans may have pre-payment penalties as well.

4All lenders are responsible for their own interest rates and payment terms. Max Cash has no control over these rates or payments. Use of the work competitive or reasonable does not mean affordable and borrowers should use their own discretion when working directly with the lender.

5The amount of people who applied for a loan and we helped and those who received a loan is not the same. We cannot guarantee we will find a lender who will fund you. Just because you give us information on this web site, in no way do we guarantee you will be approved for a car title loan or any other type of loan. Not all lenders can provide loan amounts you may see on this web site because loan amounts are limited by state law and/or the lender. Some lenders may require you to use a GPS locator device on your car, active all the time, in the circumstance for an auto title loan. They may or may not pay for this or charge you for this. This is up to the lender and we have no control over this policy of the lender. Typically, larger loans or higher risk loans use a GPS.

In some circumstances faxing may be required. Use of your cell phone to receive updates is optional. Please review our privacy policy.

Loans such as Car Title Loans are expensive and you may have other ways to get funding that is less expensive. These types of loans are meant to provide you with short term financing to solve immediate cash needs and should not be considered a long-term solution. Residents of some states may not be eligible for a loan. Rejections for loans are not disclosed to our firm and you may want to contact the lender directly.

Signature and personal loans are only available in Georgia and Florida. Loan amounts differ at locations. Account approval requires satisfaction of all loan eligibility requirements, including a credit inquiry, and, if applicable, motor vehicle appraisal.

Car Title Loan lenders are usually licensed by the State in which you reside. You should consult directly with these regulatory agencies to make sure your lender is licensed and in compliance. These agencies are there to protect you and we advise making sure any lender you receive money from is fully licensed.

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