| Chicago home equity loans are the type of loans | | | | (APR) for a loan with the APR for a home equity loan |
| where the borrower uses the equity in his Chicago | | | | because the APRs are figured differently. The APR |
| home as collateral. You can lose the home and be | | | | for a regular loan takes into account the interest rate |
| forced to move out if you don't repay the debt. Such | | | | charged plus points and other finance charges. The |
| loans are often used by families in need of financing | | | | APR for a home equity line is based on the periodic |
| help to make major home repairs, pay medical bills or | | | | interest rate alone. It does not include points or other |
| college tuitions. Chicago home equity loans create a | | | | charges. |
| lien against the borrower's house. Equity is the | | | | Here are the steps you should follow when considering |
| difference between how much the home is worth and | | | | a home equity loan in Chicago: |
| how much you owe on the mortgage (or mortgages, if | | | | 1) Check your options - home equity loans are not the |
| you have more than one on the property). Such loans | | | | only method of financing. Remember, if you decide to |
| require an excellent credit score and reasonable | | | | get a home equity loan and can't make the payments, |
| loan-to-value ratios. An individual can apply for an | | | | the lender may foreclose and you would lose your |
| equity loan, no matter the type of home he has. It can | | | | home. |
| be a condo, house, apartment, or townhouse. | | | | 2) Do the research - if you are keen on getting such a |
| The maximum amount that you can borrow through a | | | | loan, then talk with several lenders, including at least |
| home equity loan depends on your credit score, | | | | one bank or credit union in your community. Compare |
| monthly income, and the appraised value of the | | | | their offers. Comparing loan plans can help you get a |
| collateral, among others. It is possible to borrow up to | | | | better deal. Beware of loan terms and conditions that |
| 100% of the appraised value of the home. Chicago | | | | may mean higher costs for you. Keep in mind the |
| home equity loans can be of two types, closed- and | | | | following parameters: |
| open-end. Closed-end home equity loans generally | | | | -Can you afford the interest rate and monthly |
| have fixed rates and can be amortized for periods | | | | payments? |
| usually up to 15 years. The open-end loans, also known | | | | -The period of the loan, or how long you have to pay it |
| as HELOC (home equity line of credit) loans, are at a | | | | back |
| variable interest rate, but here the borrower chooses | | | | -Check the penalties for late or missed payments |
| when and how often to borrow against the equity of | | | | 3) Double check - think twice before signing the |
| the property, with the lender setting an initial limit to the | | | | contract. Have an attorney review the loan papers |
| credit line. | | | | and make sure the terms are the same ones you |
| But when comparing the two, keep in mind that you | | | | agreed on. |
| cannot simply compare the Annual Percentage Rate | | | | |