| Home Equity Loan in terms of common man is, by | | | | given. And at the time of closing a lump amount of |
| using an individuals home he can borrow money. In this | | | | money can be borrowed and will not be able to get |
| case the property is used as a collateral guarantee for | | | | further amount. The loan amount will be determined by |
| the money received. It has been understood that the | | | | analyzing the credit history, income and value of the |
| individual has to repay the debt within a time frame, | | | | collateral. For this type of loan they have a specific |
| and if he fails to do so the money lender can sell the | | | | period say up to fifteen years. |
| collateral and take his money back. So, in this case the | | | | Home Equity line of credit will offer the borrower a |
| equity in the home is used as collateral. If the debt has | | | | cheque book or a credit card which can be made |
| not been paid the concerned party will be forced to | | | | used to borrow money against the home equity when |
| lose his home. If the loan amount has been paid, in full | | | | and how often the concerned party requires the |
| then the property will be the buyers. Equity can be | | | | amount. Until a purchase is made against the equity the |
| explained as the difference between the worth of the | | | | interest will not begin to accumulate. This type is also |
| home and how much loan exists on the mortgage and | | | | known as open end home equity loan. The period |
| the banks will lend money against the equity only. This | | | | fixed generally to repay the loan is over thirty years at |
| type of loan is taken for the purpose of major home | | | | a varied interest rate. |
| repairs or improvements, education expenses, wedding | | | | Generally home equity loans have some specific fees |
| expenses, medical expenses etc. | | | | and some of them are Evaluation fees, Inventor fees, |
| Home Equity loan can be classified into two different | | | | Stamp Duties, Concluding fees, Arrangement fees, |
| types as, Traditional Home Equity Loan and Home | | | | early pay-off, Surveyor or Conveyor or valuation. In |
| Equity Line of Credit and these are also known as | | | | some cases, some of them may be ignored. This can |
| second mortgages, as they are safe by the security | | | | be increased or decreased if the concerned party has |
| of property. These types of loans are returned in a | | | | his personal surveyor to examine the property. The |
| short span of time than the first mortgage. | | | | fees differ from loan to loan so that the parties |
| Traditional Home Equity Loan is also known as closed | | | | concerned must have a clear picture in the beginning |
| end home equity loan which means the money | | | | itself. This type of loan helps in tax savings because |
| borrowed must be returned or repaid within a | | | | the interest paid against the home equity loan is |
| predetermined period. In this type, the interest will start | | | | tax-deductible. |
| to accumulate immediately after the money has been | | | | |