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You may qualify for a home equity loan if you have a substantial amount of equity in your home. To get the best rates, you need to have a good loan-to-value ratio. Loan-to-value is basically [http://www.swissrolexreplica.us/Tag-Heuer-Watches/link/ swiss link Replica Watches]the percentage of the loan amount as compared to the value of the home. For instance, if your home is worth 100,000 and your loan is 80,000, then the total loan-to-value should be 80 percent. Usually, a home equity loan can be set at a fixed rate.
A HELOC (home equity line of credit) is a special type of home loan with an adjustable interest rate. A home equity line of credit is similar to a credit card because it allows you to tap into your equity when you choose. Instead of borrowing money in one lump sum, you open a credit account similar to a credit card. As the HELOC is secured by putting your house up as collateral, you may get much lower interest rates. You may only borrow (and pay interest on) money when you need it and you can leave it alone and only use it in emergencies. As the underlying collateral of a home equity line of credit is the home, failure to repay the loan or meet loan requirements may result in foreclosure. As a result, lenders generally require that the borrower maintain a certain level of equity in the home as a condition of providing a home equity line.
How large a HELOC will be depends on how much equity you have in your home. HELOC loans became very [http://www.swissrolexreplica.us/Chopard-Watches/ swiss Chopard Replica Watches]popular in the United States in the early 2000s, in part because interest paid was (and is) typically (depending on specific circumstances) deductible under federal and many state income tax laws.