Question:

Can I get a 30 year home equity loan?

Answer:

Well, the 30 year home equity loan is usually the longest term home equity loan offered on the market. A home equity loan is a nice tool to provide funding for anything you may need - emergency funds, consolidate bills, home rehab. Even spend it on a vacation, if this is what you desire. Spending your equity on a vacation is not recommended, though. Don't trust your lender that it's worth it.

How to best benefit from a 30 year home equity loan?

Firstly, interest on home equity loans is deductible. That means even if you are paying high interest, you are eligible for tax deductions. Use professional tax services to figure out how much interest you could possibly write off.

Secondly, look for a choice of fixed vs adjustable rate. A home equity loan (HEL) is usually sold with a fixed rate; if you need adjustable rate, try a HELOC. Home equity lines of credit are usually furnished with adjustable rate and also provide tax deductibility. However, HELOCs have a shorter term and you may not find a 30-year HELOC.

Thirdly, getting a home equity line is associated with much lower closing costs compared to refinancing with cash-out. If you are charged large closing costs to take a HEL, walk away.

Also, with a 30 year home equity loan you could do over equity - that is, borrow more than the value of your home. 125% is the standard limit for over equity financing. Avoid over equity, though. If your home depreciates, or you have to move, you may have trouble selling your home for 125% of its value. If you live in a high cost metropolitan area over equity loans make sense. Even if the real estate market fluctuates, sooner or later home prices go up.

Some 30 year home equity loans (HELs) may have interest-only payment for a limited time - 1 to 5 years with loan amortizing payments afterwards.

Also, locking and closing a loan via the internet from anywhere around the globe is the most modern feature offered by some online lenders. However, make sure you are closing a deal with a renowned lender to avoid internet fraud.

Mortgage rates hit their lowest since 1955. Ask the home loan experts we recommend Quicken Loans how to take advantage of them.
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