An equity loan is a mortgage placed on real estate in exchange for cash to the borrower. For example, if a person owns a home worth $100,000, but does not currently have a lien on it, they may take an equity loan at 80% loan to value (LTV) or $80,000 in cash in exchange for a lien on title placed by the lender of the equity loan.

Many lending institutions require the borrower to repay only an interest component of the loan each month (calculated daily, and compounded to the loan once each month). The borrower can apply any surplus funds to the outstanding loan principal at any time, reducing the amount of interest calculated from that day onwards. Some loan products also allow the possibility to redraw cash up to the original LTV, potentially perpetuating the life of the loan beyond the original loan term.

The rate of interest applied to equity loans is much lower than that applied to unsecured loans, such as credit card debt. The reasoning behind this is that equity loans involve collateral, and credit card debt does not.

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Thu Jun 11 17:29:12 2009

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From Yahoo Image Search: "equity loan"
Sat Jun 27 14:31:41 2009

A Reverse Mortgage to Save a Business | New Jersey Real Estate
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A Reverse Mortgage to Save a Business | New Jersey Real Estate

admin

Mon, 22 Jun 2009 12:24:46 GM

She heard about reverse mortgages from a Bank of America representative who was helping with the home-. equity loan. . She'd also heard about them on TV and was skeptical, but met with a housing counselor anyway and eventually decided it ...

The Oldest Business Funding Question: Debt Versus Equity
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The Oldest Business Funding Question: Debt Versus Equity

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Sat, 20 Jun 2009 23:00:00 GM

Another positive value of a debt . loan. vs. an . equity loan. is that the interest paid on a debt . loan. is tax deductible. Perhaps an even bigger incentive to choose a debt . loan. is that debt . loans. offer lenders no control over the way the ...

How To Choose Between A Fixed Rate Or Adjustable Rate Home Equity Loan
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How To Choose Between A Fixed Rate Or Adjustable Rate Home Equity Loan

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Mon, 08 Jun 2009 22:32:35 GM

In the case of home . equity loans. , a borrower's preference for an adjustable rate or fixed rate will determine the type of home . equity loan. they obtain. The two basic home . equity loan. options are a traditional second mortgage and a home ...

From Google Blog Search: "equity loan"
Sat Jun 27 14:31:08 2009

US CREDIT-Ford likely to pursue further debt restructurings - Reuters
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us credit-Ford likely to pursue further debt restructurings

Reuters

The company also raised $1.4 billion in an equity offering in May. As the company taps government loans and continues to burn through cash its gross debt ...

Analyst Makes The Case That Ford (F) Is Significantly Overvalued StreetInsider.com (subscription)



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'American dream' became nightmare for subprime borrowers - Times
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'American dream' became nightmare for subprime borrowers

Times

In May of 2006, she refinanced the $3000 left on her mortgage and paid off her bills with a home equity loan through Saxon Mortgage, a subsidiary of Wall ...



and more »
The Mortgage Slump Hits Home Renovations and Home Equity Loans - fox4kc.com
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The Mortgage Slump Hits Home Renovations and Home Equity Loans

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In most cases, home- equity loans were used to finance these home improvement projects. A home- equity loan is a special type of loan which allows homeowners ...



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From Google News Search: "equity loan"
Sat Jun 27 14:30:48 2009

Can a fixed home equity loan drop my credit score?
Q. I requested $10,000 dollar home equity loan to roof my house. My FICO score was 780 until approx March when I applied for a home equity loan at a fixed rate. Now my FICO score is 740. What happened? I am never late on any payments. I pay over the minimum amount do on my card every time.
Asked by happydawg - Tue Jul 1 12:10:36 2008 - - 3 Answers - 0 Comments

A. There are a number of factors that go in to the scoring model and on time payments is a major one, but not the only one. Having a new account can be a risk factor all by itself. Since it is a closed end loan, the balance is near the limit and it has probably only just started reporting. I wouldn't freak out or anything. A 740 is still pretty darn good. My scores boucne around with little rhyme or reason. Sometimes opening a new account can have a positive affect. I went to Home Depot to buy $300 worth of windows and walked out with 20K in new credit. Having the additional available credit had a very favorable affect on my scores. I don't have to use the credit if I don't need to. Also, if you have a balance on a credit card that is… [cont.]
Answered by Dale H - Tue Jul 1 12:35:16 2008

Can I apply for home equity loan while house is listed for sale?
Q. In MD area, is it possible to apply for home equity loan while house is listed for sale? I am trying to purchase a land/lot, but need home equity loan for downpayment. I know loan guidelines have been pretty tight recently. If my house is sold, home equity would obviously be paid off from the proceeds. Thanks Thanks for all replies. Since loan is secured by the property.. won't they get their money once property is sold !! what am I missing here ??
Asked by User - Tue Apr 28 13:14:48 2009 - - 5 Answers - 0 Comments

A. No...lenders will not make loans on property listed for sale. If you need to get a loan remove your home from the market and then apply for the loan. In the past I've seen lenders refuse to make a loan on a property just a couple of days before the 2nd trust deed closing, when the lender discovered that the property in up for sale.
Answered by Glenn S - Tue Apr 28 13:30:10 2009

When getting a home equity loan does the bank or credit union do an appraisal on your property?
Q. When getting a home equity loan does the bank or credit union do an appraisal on your property?
Asked by z400wood - Fri Nov 7 20:57:08 2008 - - 6 Answers - 0 Comments

A. Yes, of course, they need to determine how much equity there is.
Answered by Landlord - Fri Nov 7 21:04:16 2008

From Yahoo Answer Search: "equity loan"
Sun Jun 28 23:17:02 2009

See also:

  • Making Home Affordable.GovMaking Home Affordable.Gov
    makinghomeaffordable.gov
    Information about refinancing and loan modification options available under the Home Affordable Refinance Program.
  • AOL Real Estate: Making Homes AffordableAOL Real Estate: Making Homes Affordable
    realestate.aol.com
    Information about government assistance and other resources for homeowners to make homes affordable.
  • HUD On Your Side: Buying A HomeHUD On Your Side: Buying A Home
    hud.gov
    Various topics are covered from settlement costs to buying land and new construction. Department of Housing and Urban Development.
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Sat Jun 27 03:11:49 2009