Fri 13 Jun, 2014 07:19 am
Why should I need to use my equity?
You shouldn't, if you live within your means, like responsible people do.
If you get in a position that you must borrow money, then a home equity loan might be the lowest interest rate and the best payment terms that you can obtain. You should protect your equity like you do any other asset you have but sometimes people have good reasons to borrow. What you should avoid at all costs is going on a spending spree using your home equity.
Home equity is a difference between the value of your home and how much you owe against the bank. For example, if your home worth $ 600,000 and you owe to bank $250,000 then you have$190, 000 equity. The main advantage of home loan is that it can used as security with the bank and borrow against it. It helps in following purpose:
To extend your home.
To buy a car.
To go on a holiday.
For any use the bank allows.
A home equity loan is a kind of financial loan in which the customer uses the equity of his home as guarantee. Home equity loans are generally used to fund major expenses such as home repairs, medical bills, or college education. It has several benefits like Low Interest Rates, Flexibility, Stability.