1. The difference between a home loan and a
home equity loan lies mainly in that the home
equity loan, also known as a second or even
third mortgage, is issued at a higher interest
rate. This interest rate is lower than you could
expect to pay on a credit card, but it will be still
higher than the original interest rate.
mortgage calculator UK
2.
3. Use a home equity mortgage calculator to see what releasing
different percentages of your equity makes to the payments required
The mortgage calculator then allows you to compare whether this is
the best course of action open to you The alternative which may be
4. more attractive financially is refinancing your home completely This
is where the mortgage calculator can really work for you There are a
number of options when refinancing, especially if you have a
substantial amount of equity in the home
5. By inputting these, one at a time, into a mortgage calculator you can
create a list which will allow you to clearly see which option benefits
you best Home equity loans often seem far more attractive to the
home owner than they actually are This is because the lender is
hoping to seduce you into signing your property into his hands Find
out all the details and use your mortgage calculator See if what you
calculates matches what they want you to sign for
6. Later you may find that it wasn't such a good idea as your home
suddenly becomes under threat of foreclosure because of some
contractual obligation that you hadn't fully understood Only in
extreme circumstances should you even consider a home equity
loan that completely strips your property of any value over mortgage
total Keep your payments affordable by using the mortgage
calculator and always factor in an additional percent or two on the
interest rate Refinancing your home is a major step, but as with a
first mortgage this is the only claim on your property If you take out a
home equity loan instead, then you will have an additional lender
who has a financial stake in your home
7.
8. If you decide that you much prefer the terms on the home equity
loan, and the mortgage calculator seems to bring it well within your
budget, then make sure you read the small print carefully You need
to know what the payments are for: are they just interest which will
leave a large capital balance payable at a later date, for example?
Make sure you can afford these additional monthly payments Here
are a few don'ts that will help you in the long run: * Don't lie to
yourself or your mortgage calculator * Don't over-estimate your
income under any circumstances; treat overtime money as "extra" if
possible, and not part of your usual salary *Don't over-estimate the
equity in your home in the mortgage calculator
9. This can lead to false hopes which your property appraiser will
quickly dispel If you are hoping to use the mortgage calculator UK
released capital to make home improvements, these should add
value to your property Look into this carefully to find out
approximately how much you'll be increasing your property's value
before committing to either the loan or having the work carried out
Failure to carry out the work means you are still responsible for the
loan, but that you have not created any new equity
