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Another question what steps do i take in getting the equity. How do i find how much it is. What would make anybody take out a loan on money that is theirs.

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officerdouglas

Asked by officerdouglas at 10:07 AM on Jan. 25, 2010 in Money & Work

Level 2 (10 Credits)
Answers (3)
  • Equity in your home is the difference between what it's worth and what you owe on it. You can use this difference to get a home equity loan; you are basically getting a second mortgage, this equity is the collateral. The best place to start is your mortgage lender, typically they will send an appraiser to your home, determine the current value, and then tell you how much money you can borrow. There are other companies that offer home equity loans, just make sure to read the terms - there are many out there that charge extremely high interest. As far as why one would do this - you can deduct the interest, and the interest rates are lower than with non-secured loans.
    Scuba

    Answer by Scuba at 11:03 AM on Jan. 25, 2010

  • 'Equity' is what you make on a home you sell, after paying off what you owe on it.

    'Equity-access loans' are a way of binding that value up in debt: a way of making it so instead of having a positive net worth (wealth) what you have is negative net worth (debt/poverty). If the value of the house drops, you not only lose the equity that was used to secure the loan, but end up owing more than the property is worth (which is what happened in the last housing bubble disaster all over the US).

    What is really is, with it's pretty name, is extremely expensive debt. Like a mortgage, the money is paid back over such a long time that the interest paid may be 2-5 times what was borrowed: making whatever you bought cost you 2-5 times the sticker price.

    Would you buy a car for 5 times the price? Equity borrowing makes that possible. What a great way to stay poor, eh?
    LindaClement

    Answer by LindaClement at 11:28 AM on Jan. 25, 2010

  • Equity is what yo have invested in your Home. I have found that home Equity Loan to really to be beneficial is to rpair your Home & not to just get money to be getting money. If you want to get esy money maniulate your credit cards Use them & Not You.
    Jodie269

    Answer by Jodie269 at 7:38 PM on Jan. 25, 2010

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