How to use a home equity loan

This will teach you some great uses for a home equity loan or line of credit

Difficulty: Moderately Easy

Instructions

Things You'll Need:

• A house
• a decent credit score
• a job with income or liquid assets

1. Home Equity lines and loans can be used for tons of different things. You should be smart because it could get you in trouble ( like a lot of America right now) So step one is to use your head.

2. Some basic uses are consolidating higher rate credit cards and other debts, paying for children's education, home repair, medical reasons, buying a new car, vacation, starting a new business, buying a 2nd/vacation home and many many more.

3. A credit line is set up for you to use at any time. Most home equity lines have a 10 year access period and allow 20 additional years to pay back after the first 10 years. You will usually get a check book to draw down on the credit line and some states allow a credit card to be attached. Many banks will allow you to get home equity funds right at the teller (only if that bank has your home equity loan). Lots of banks now let you move money from your home equity on-line.

4. You can deposit the check right to your own bank account or give it to a 3rd party. It is that simple

Tips & Warnings

• The biggest tip I can give is don't get crazy. Be reasonable. Stay with in your means. You might not need $40,000 marble counter tops just because you have the credit line. You can have a much lower payment than some car loan rates, but you don't need to buy a $90,000 car if you can't afford it.
• A home equity is a mortgage any way you slice it. You will have a lien on your property. If you start using your home equity and can't afford the payments, you can go into foreclosure.

Resources

• http://www.mikenatter.com