Search:

Would you like to contribute to this site? Equity Menu Submit an Article Submit a Tip Place your Ad Add URL Equity Questions? Contact Us  Home Equity   Home Equity Loans   Home Equity Rates   Equity Mortgage   First Mortgage   Second Mortgage   Equity Loans   Equity Loan Rates   Equity Lines   Equity Financing   Equity Capital   Private Equity   Private Equity Capital   Private Equity Investments   Equity Funds   Equity Investments   Equity Annuities   International Equity   Equity Firms   Equity Companies   Equity Value   Investment Capital   Growth Capital   Venture Capital   Asset Management   Loan Refinancing   Debt Equity   Types of Equity   Equity Information

Return To Equity Article Archive   Interest-only Home Equity Loans - Is It Smart? By L. Sampson When applying for a home equity loan, homeowners have several options. Usually, loan applicants select loan packages that offer affordability, which generally consists of low monthly payments. For this reason, adjustable rate home equity loans are popular because they offer low initial rates. Homeowners may also choose an interest-only home equity loan because they offer similar low rates. What is an Interest-Only Home Equity Loan? Second mortgages or home equity lines of credits are types of home equity loans. Both options pledge your home as collateral. Ordinarily, home equity loans have fixed terms and interest rates. Because of low rates, these loans are more ideal than credit cards. Interest-only home equity loans offer the same benefits. The only difference is that homeowners are allowed to make interest-only periods for a specified time frame. During this period, the monthly payments are considerably lower. Interest-only periods vary. The average length is usually one to seven years. However, some lenders will offer interest-only periods up to ten years. Advantages of Interest-Only Home Equity Loans If borrowing a small amount of money and selecting a short interest-only period, these loans may not present future risks. In some instances, homeowners who intend on selling their property will apply for an interest-only home equity loan, use the money to improve the property, which boosts the value, and then re-sell. In this instance, interest-only home equity loans are beneficial. Disadvantages of Interest-Only Home Equity Loans Many homeowners are attracted to interest-only home equity loans because of low monthly payments. Yet, it is vital to consider the pros and cons before selecting this option. Eventually, homeowners will have to begin paying the principle balance. If opting for an interest-only home equity loan option, its better to select a shorter period, perhaps one or two years. Those who choose a longer interest-only period may be hit with significantly higher monthly payments. If this happens, affording the payments may prove challenging. Of course, homeowners also have the option of refinancing for a standard fixed home equity loan at the conclusion of the interest-only period. About the Author: Visit Home Equity Wise for more information on an Interest Only Home Equity Loan. Investment Capital Advisors

Get your Equity questions answered... Subscribe to our Equity Newsletter FREE! Your First Name: Your Email Address: Enter above security code

Home  |   Equity Blog  |   Ask the Equity Expert  |   Equity Archive  |   Equity RSS Feeds  |   Advertise  |   Sitemap