Fixed Rate Home Equity Loan

As the owner of your own home, you have a very important resource available to help you weather many financial storms including the current global credit crunch. With the credit crunch in the news on a daily basis, it’s a good time to take a look at the equity tide up in your biggest asset – your home. A home equity loan or home equity line of credit (HELOC) is a loan, which is basically granted using your house’s value as collateral. The size of the loan will depend on the difference between your current mortgage value and the current value of your home.

A is a great way of freeing extra cash which you can use for a variety of purposes including debt consolidation, wealth creation through good sound investment of capital, education, home improvement etc.

But before you decide on a or on a variable rate home equity loan its best to compare the pro’s and cons of each type so that you can make the right decision for you.

With your home equity loan being one of the biggest long term financial decisions you’ll make, its best to get the decision right from the very beginning. Getting it wrong could literally cost you thousands.

The question is whether to consider or a variable rate home equity loan.



A is a loan where the interest and thus the repayment are fixed at a certain interest rate for a certain period. The period varies but can be anything from two to five years to the length of the loan. The pros of a are:

Cons of a include:

A can help to cap your payments and they make it easier to budget. The best time to take advantage of a is when the rates dip a little. You can then refinance your home equity loan with and take advantage of the fact that rates will climb.

Variable Rate home equity loan

As opposed to , the interest on a variable rate home equity loan changes all the time. This means that when interest rates climb, so does your home equity loan repayment.

The pros of this type of home equity loan is that if rates fall, so does your repayments, but unlike , it is very difficult to budget for payments which fluctuate. This type does however allow you to take advantage of changing market conditions.

If the current rates are high, then its best to go for a variable interest rate loan and then once the rates fall, to try to change it to .

For more information please visit http://www.low-rate-payday-equity-home-loans.com for more information