Uses & Benefits of Home Equity Loans

Home equity loans have many uses and benefits for families and people with equity in their homes.

Home equity loans are gaining more popularity. 

Home equity loans gained popularity back in 1996. However, with the housing crisis during the recession, these kinds of loans took a back seat. They are gaining popularity now, allowing home owners to draw a second mortgage which they can borrow against the equity in their home. 

For instance: If the market value of the home is $250,000 and the home owner has paid installments up to $70,000, then he is eligible for a home equity loan on the equity value ($70,000). Such loans are provided only if the equity in the home is worth more than 20 percent of the total market value. Massachusetts mortgage lenders mostly provide loans up to 85 percent of the equity in the home. In this case, the loan may be provided to the extent of $59,500. 

Benefits

Home equity loans are beneficial as they are an easy source of cash for home owners. Home equity loans are mostly borrowed for home remodeling or renovations, among other things. They are also often borrowed for unexpected expenses like a medical emergency. They can also be borrowed to cover the children’s education expenses.

What sometimes makes home equity loans attractive is their rate of interest, which can be lower than the rates of credit cards and other consumer loans. Moreover, interest paid on the home equity loan is tax deductible. 

Home equity loans are therefore, a great method of financing, which home owners can conveniently use in times of need. For more information about the terms and conditions of home equity loans, visit www.dedhamsavings.com.