Pittsfield, MA -- (SBWIRE) -- 08/16/2013 -- Real-estate-yogi.com would like to share its wisdom about this topic, such as:

- HELOC Defined
- Home Equity Loans Explained
- Cash-Out Refinance Option
- Where & How to Apply

Defining HELOC

A fixed rate home equity line of credit (HELOC) is simply a giant credit card based on the equity in one’s home. This is a good way to get some money to put toward remodeling one’s house. There’s a “draw” period for HELOCs of up to 10 years, and the borrower only has to pay interest on the money he actually uses. Because of the fixed interest rate, he will always know how much his monthly payment will be, which is important for budgeting purposes.

Fixed Rate Home Equity Loans Instant Approval, Get Value For Home Equity

Clarifying Home Equity Loans

Fixed rate home equity loans are different from HELOCs. They are effective for those who need a lot of money for a project. The borrower receives the cash in a lump sum and pays interest on it. This is basically a second mortgage, with the positive attribute of the fixed rate. A person pays both the principal of the loan and the interest on it each month. Rates may be somewhat higher than those of an adjustable rate HELOC, but many people feel the security of the never-changing payment is worth it.

Cash-Out Refinancing

Another way to obtain the money one needs for a high-priced expense is a cash-out refinance. This differs from both a fixed rate home equity line of credit and a fixed rate home equity loan. Once one has a great deal of equity in his home, he can take advantage of refinancing his entire mortgage for more than what he owes on it. This gives him the cash he needs for whatever his project is.

How & Where to Apply

Applying for a fixed rate home equity line of credit or a home equity loan is fairly easy. Go to a bank and ask about it. They’ll ask for certain documentation, such as a valid identification card (driver’s license, state ID card), proof of income, and, if it’s not the original lender, a copy of the mortgage agreement. Having these on hand during the application process will move things along more quickly.

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